A new survey suggests that nearly 7 in 10 Americans have only $1, 000 or less in their savings accounts. GoBanking asked 7, 000 people around the country how much money they had set aside in savings accounts for the future, and found that 34 percent of them have absolutely no savings at all.
A small portion of the respondents, 15 percent, have $10, 000 or more in their savings accounts, while a further 4 percent have between $5, 000 and $10, 000. GoBanking said that people living beyond their means is one likely reason for the downward trend in savings. The rise of cashless payment options has made it easier than ever to spend money, resulting in more people splashing their cash electronically without giving it a second thought.
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Statistics and facts on savings in the United States
In the area of personal finance, saving is the preservation of money for future use. Saving rates in households change over time and are dependent on the economic environment. During financial booms, people tend to spend more and save less. However, when the economy slows down, families concentrate on preserving their capital and prepare for the hard times. The personal saving rate in the United States amounted to three percent in 2007 and it doubled in the years following the financial crisis in 2008.
There are various reasons why people save. Short-term goals can include saving money for holidays, purchases or renovating a house. In the long term, the most crucial reasons for putting money aside are related to the need for covering costs of children’s education or ensuring financial stability in retirement.
Saving is closely related to investing. Once a certain amount of money is put aside, questions about the possibilities of letting it grow arise. Hiding the money under a mattress is not a solution as inflation will eat up the savings. There are many financial instruments available on the market which can meet the needs of both prudent and risk-loving investors. Money can be placed in savings deposits to earn modest interest, for instance. The value of savings deposits in the United States grows from year to year, reaching 7.62 trillion U.S. dollars in 2014. For longer-term savings, money market instruments or bonds are more appropriate as they too are low-risk investment options but offer a higher return rate than savings deposits. Savings can also be entrusted to professional fund management companies. The share of American households owning mutual funds reached 43.3 percent in 2014.
Statistics and facts about retirement saving in the United States
For those who wish to enjoy a comfortable lifestyle in retirement, saving is important and while the the total financial assets of U.S. federal government retirement funds in Q4 of 2011 amounted to around 1.5 trillion U.S. dollars – up from 797 billion in 2000. With a mounting deficit, financial troubles and public debt levels at over 70 percent of GDP, the pension system is in an acute state of crisis.
Entitlement programs such as social security have been under attack in Congress from both sides of the isle. Curtailing spending on these entitlements is among the suggestions being made as a means of lowering the national deficit. The number of Americans aged between 50 and 64 with no retirement savings is alarmingly high and on the increase. It is also being suggested that those saving accrued by middle-class seniors will be nowhere near sufficient to support their current standards of living. This fact has been supported by American citizens during a survey aimed at determining the impact of the recession on retirement plans, in which 60 percent of those surveyed stated that they may have to delay their retirement as a direct result of the financial crisis.