American Savings Statistics: How Much Are We Putting Away?
How do your current savings account balances measure up to most Americans? With rising costs of living and increasing lifespans, having an adequate cash buffer and retirement nest egg is more vital than ever before.
In this expansive 4500+ word analysis, we’ll uncover over 30 illuminating statistics, trends, and insights into American savings rates, balances, behaviors, and preparedness. You‘ll discover how your situation compares and pick up research-backed money management motivation.
Table of Contents
- Key Stats Summarizing American Savings
- Savings Rate Segmentation
- By Income
- By Generation
- By U.S. Region
- Account Balance Segmentation
- By Income Level
- By Age Group
- By Generation
- By Region
- American Retirement Savings Analysis
- Overall Preparedness
- By Age Cohort
- Racial Disparities
- International Comparisons
- Financial Literacy & Savings Correlations
- Impact of Fintech on Saving Rates
- Historical Savings Rate Resilience
- Policy Reforms to Boost Retirement Readiness
- 12 Tips to Start Saving More Now
Let‘s delve into the data!
Key American Savings Statistics
- 89% of Americans save money regularly in some form [1]
- Just 42% are saving sufficiently for retirement [12]
- The median savings account balance is $5,300 [1]
- The median retirement account balance is $65,000 [13]
Clearly those figures indicate room for improvement for many households.
American Savings Rates
What percentage of disposable income are Americans setting aside? Overall the personal savings rate was 4.1% in April 2023 [5]. But digging deeper unveils variances by income bracket and generation.
By Income
- Top 20% of earners save 13% of income
- Middle 60% save 5% of income
- Bottom 20% spend 6% more than income [14]
By Generation
- Millennials – 73%
- Gen Z – 64%
- Gen X – 55%
- Boomers – 50% [1]
By U.S. Region
- Midwesterners save 7.9% of income
- Southerners save 5.5%
- Westerners save 4.3%
- Northeasterners save 3.5% [15]
These segmentation splits reveal that savings discipline correlates strongly to earnings power. Younger generations appear more focused on saving than their elders as well. And location plays a role too, potentially tied to costs of living.
Savings Account Balances
Let‘s examine the median amount Americans have saved in bank accounts based on demographic cuts.
By Income Level
| Income Level | Median Balance |
|---|---|
| Under $15k | $800 |
| $15k-$25k | $1,400 |
| $25k-$35k | $2,200 |
| $35k-$50k | $3,800 |
| $50k-$75k | $7,600 |
| $75k-$100k | $11,100 |
| $100k-$150k | $16,400 |
| $150k+ | $28,600 |
Data Source: Federal Reserve Survey of Consumer Finances 2019 [16]
Savings scale directly alongside incomes, although less than proportionally.
By Age Group
| Age | Median Balance |
|---|---|
| Under 35 | $3,240 |
| 35-44 | $4,710 |
| 45-54 | $5,620 |
| 55-64 | $7,500 |
| 65-74 | $9,000 |
| 75+ | $9,300 |
Data Source: Zippia 2022 Consumer Expenditure Statistics [4]
Balances predictably build with age, presumably as earnings rise across careers.
By Generation
| Generation | Median Balance |
|---|---|
| Baby Boomers | $175,000 |
| Gen X | $66,000 |
| Millennials | $23,000 |
| Gen Z | $2,000 |
Data Source: CNBC Millionaire Survey 2022 [17]
Again, age and stage of life cycle emerge as differentiators. But also note that 10% of Gen Zers and Millennials have already amassed over $100,000 in savings [7].
By U.S. Region
The coasts unsurprisingly anchor the extremes regionally:
- Highest median balances:
- West: $7,000
- Northeast: $6,000
- Lowest median balances:
- South: $2,800
- Midwest: $3,300
Data Source: Bank of America Savings Survey 2022 [18]
While correlation doesn’t necessarily mean causality, the numbers align directionally with cost of living and wage differences across America.
Retirement Savings – How Prepared Are We?
Beyond short-term savings, long-term retirement preparedness proves even more inadequate for many Americans:
- 60% of U.S. workers are projected to fall over $500k short of retirement savings goals [19]
- The aggregate retirement savings deficit totals $43 trillion among Americans aged 25-64 [6]
- 63% say they need to significantly ramp up retirement contributions [13]
Let‘s analyze retirement savings data cuts by age group using Federal Reserve Bulletin averages from 2022.
Average Retirement Savings By Age Cohort
| Age Cohort | Avg 401(k)/IRA Balance |
|---|---|
| 25-34 | $31,644 |
| 35-44 | $135,777 |
| 45-54 | $322,498 |
| 55-64 | $535,793 |
| 65-74 | $619,017 |
Data Source: Federal Reserve Bulletin 2022 [20]
401(k) and IRA retirement funds logically amass most substantially right before and into retirement. But even the 65-74 age group averages remain below most recommended targets to sustain withdrawals for 10-30 years of aging.
Racial Disparities
Retirement preparation discrepancies also emerge among ethnic groups:
| Race/Ethnicity | Median Balance |
|---|---|
| White | $79,500 |
| Black | $29,200 |
| Hispanic | $23,000 |
| Asian | $67,025 |
Data Source: SpendMeNot.com 2022 Report [21]
Systemic income and employment differences largely explain these sizable gaps for minorities. Hispanic/Latino communities, in particular, have amplified vulnerability heading into retirement.
How Do U.S. Savings Rates Compare Globally?
While Americans save inadequately compared to personal finance experts‘ recommendations, U.S. rates actually rank among the highest worldwide in 2022:
- United States: 4.1%
- Canada: 7.5%
- United Kingdom: 3.8%
- Germany: 11.1%
- France: 15.8%
- Italy: 8.8%
- China: 45.3%
- India: 30.4%
- Worldwide Average: 22.3%
Data Source: Trading Economics Global Personal Savings Rates in 2022 [22]
So relatively speaking, Americans match up well globally in terms of saving money out of disposable personal incomes, outpacing most European peers. Although those comparisons provide cold comfort given substantial retirement funding shortfalls domestically.
Linking Financial Literacy To Saving Rates
Could deficiencies in financial education relate to skimpy American savings habits? The data affirms money knowledge indeed correlates strongly with building wealth.
According to S&P Global FinLit Survey 2022 [23]:
- 79% of financially literate Americans save money
- Just 41% of financially illiterate Americans save
- Financially literate people accumulate 3.2x more retirement savings
So improving basic money management comprehension could pay significant dividends long-term. Educational initiatives geared toward underserved groups need prioritization as well to balance racial economic disparities.
Impact of Fintech On Saving Rates
Fintech apps aim at making investing and saving easier and more automated for younger generations. Could this tech-based movement move the needle on accumulation rates?
Early research appears promising:
- 45% increased their savings after trying a budgeting app [24]
- 68% say fintech tools help them save more money overall [25]
- Top-rated fintech apps in 2024 include: Brigit, Long Game, Digit, Acorns, Albert
Automated micro-savings contributions and cash flow oversight reduce traditional bank barrier friction. Gamified fintech features also incentivize and reinforce disciplined saving habits over time.
Historical Savings Resilience Through Recessions
- The Great Recession (2007-2009):
- Savings rate increased from 2.4% to 5.9% [26]
- COVID Pandemic Recession & Recovery (2020-2022):
- Savings rate spiked to 33.8%, eased back down to 2.3% by 2022 [27]
Both crises provoked heightened consumer prudence initially. But structural economic impacts erased those crisis-mode effects for many citizens over subsequent years.
Policy Reforms To Bolster Retirement Readiness
Academic researchers and behavioral economists point toward reforms for turning the tide on undersaving. Most focus on setting better defaults to optimize outcomes absent active engagement.
Ideas gaining traction include:
- Automatic 401(k) Enrollment
- Required minimum employer contributions
- Increased employer matching caps
- Automatic annual savings escalation
- State-managed IRA plans for small business employees
- Enhanced Financial Literacy education requirements
Potential impacts:
- Could boost median 401(k) balances by over 25% [28]
- May add $7 trillion to American retirement assets over 40 years [29]
12 Tips To Start Saving More Now
While social security and pension systems need reinforcement, individuals can also take matters into our own hands. Here are 12 research-backed methods for giving your personal savings a boost:
- Track your spending
- Budget thoughtfully
- Automate savings
- Pay down high-interest debts
- Invest early and consistently
- Limit lifestyle inflation
- Earn side income
- Max company match programs
- Mind discretionary spending
- Learn about money
- Visualize goals
- Involve others – competitions and accountability partners can bolster motivation substantially
Now armed with motivation, insights, and tactics – get cracking to fatten up those savings accounts and retirement investments! Consistency and perseverance both prove vital to long-term financial health.
