By Robyn A. Friedman
City & Shore Magazine
A recent study on American finances contains some surprising — some would even say shocking — new statistics on the habits of Americans when it comes to saving money and retirement planning.
We often hear stories about how Americans aren’t saving enough — whether for retirement, college or just for a rainy day. So the analysts at MagnifyMoney.com, a finance website, decided to dive into data from the Federal Reserve and FDIC to report on current trends in American savings. Here are some highlights from their report:
- 29 percent of households have less than $1,000 in savings.
- Only 51 percent of American households have a savings account. Those that do have average savings of $32,130.
- 83 percent of American households have a checking account. Those that do have an average account balance of $11,260.
- The average American household has $175,510 worth of savings in bank accounts and retirement savings. About 83 percent of savings are in retirement accounts like IRAs and workplace-sponsored retirement savings plans like 401(k)s.
- For those households with retirement accounts, Millennials, who have just started their savings journey, have currently socked away an average of $34,030. Gen Xers have an average of $165,860 in retirement savings. Baby boomers and those born before 1946 have an average of $380,100 in retirement accounts.
“The fact that almost one-third of American households have less than $1,000 in savings is very troubling,” says Chris Trum, a senior content manager for MagnifyMoney who is based in Charlotte, N.C. “Experts often state you should have at least six months of your salary in savings in case of a job loss or other major emergency. For many Americans, just one emergency or unexpected cost could significantly damage their short-term financial outlook.”
Those getting ready for retirement should pay careful attention to savings and should sit down with a financial advisor to determine if they have enough set aside for their needs in retirement.
“It is never too late to start or resume saving for retirement,” Trum says. “Of course, the ideal situation is to invest in your retirement early. But starting your retirement planning later in life is still worthwhile as it gets you in the habit of thinking about your future and preparing for your financial well-being after you’ve stopped working.”