A couple weeks ago, we began a series on some of the unsettling savings statistics in America. Today, we will continue to investigate some of these alarming trends and how to combat them. If you missed the previous blog, click here to check it out!
Average Savings Rate
As we already discovered, many Americans – around a quarter of the population to be exact – struggle to
stash away anything. For those that are trying to save for the future, the average savings statistics still don’t look that promising. Generally speaking, the average American manages to save only 5% of his or her disposable income. From 1950 to 2000, the average savings rate was nearly double at around 9.8%, with an all-time high in May of 1975 with a savings rate of 17% and an all-time low in July of 2005 with a savings rate of only 1.9%.
What does all this mean? Well, with personal savings being at such a low rate, it’s fairly safe to say that many people may not be doing all that they could (or should) to prepare for retirement or other emergencies that may arise. Many financial advisors recommend saving 10 to 15% of disposable income and stashing the money in various accounts to prepare for retirement or emergencies and other needs. With many Americans saving nothing and those who are saving only managing to save an average of 5% or less, we still have a ways to go. Try implementing a savings plan to prepare for your future. If you need some ideas, check out our previous blog.
Average US Net Worth
Most people refer to America as the “richest” nation in the world. Although America is very fortunate 
and wealthy compared to other countries, its citizens may not be as wealthy as some people tend to think. Based off of the last census, which occurred in 2010, the average net worth of the average American is $301,000. However, the extremely rich skew that statistic a bit towards the higher end. On average, the median wealth of an average American is only $44,900. This lower-than-expected number is due to increased debt and relatively stagnant wages (just to name a few factors).
When most people think of Americans as the “richest nation in the world”, they are considering not only the freedoms and liberties enjoyed by Americans, but also the extremely wealthy upper class in America. The United States is home to more than 15 million millionaires. If you do the math, that means that about one out of every 20 people in the US are millionaires. Of course, some of those millionaires inherited their wealth. However, many of them pursued the American dream and became self-made millionaires through their own blood, sweat, and tears.
Retirement Savings is NOT a Priority
Many people look forward to their golden years – traveling the world and enjoying the “retirement” lifestyle. However, that kind of life doesn’t come without a price tag. In order to enjoy your golden years, 
you’re going to have to save in order to fund them. According to a Google consumer series of surveys, 33% of Americans have NOTHING saved for retirement. That means that one in three Americans haven’t even started to save for their future! For those that are saving for their golden years, nearly a quarter of the population has $10,000 or less in their retirement accounts. This is quite alarming considering that Social Security alone will likely not support even a modest retirement lifestyle. If you plan to live comfortably come retirement, you’re going to want to plan now and start stashing some cash into retirement accounts so the money has time to GROW! If you want to learn more about IRAs and ROTH IRAs and the power of compounding, check out two of our previous blogs!
Wealth Builders is more than just a run of the mill tax office. We are your one stop shop for all things financial. From business and personal taxes to retirement planning, we’ve got you covered! If you want to start planning for your future retirement or just start saving and need some advice on where to start, we can help! Call our office today and schedule your free consultation!
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Kirkham, Elyssa. “1 in 3 Americans Has No Retirement Savings – Money.” Time, Time, 14 Mar. 2016, time.com/money/4258451/retirement-savings-survey/.
“The Average American Saves Less Than 5%, so How Are You Doing?” Los Angeles Times, Los Angeles Times, 19 Aug. 2017, www.latimes.com/business/la-fi-savings-20170819-htmlstory.html.
The Numbers Seem to Back It Up. America’s Average Wealth Tops $310,000 Per Adult. “Middle Class Americans: Not So Wealthy by Global Standards.” CNN Money, Cable News Network, money.cnn.com/2014/06/11/news/economy/middle-class-wealth/index.html.
Wile, Rob. “Millionaire Population in U.S.: American Wealth Increases – Money.” Time, Time, 14 Nov. 2017, time.com/money/5023038/millionaire-population-united-states-world/.