Fewer Americans are managing to save money now than four years ago when the economy had first begun to stabilize after the financial collapse, according to a new survey.
Roughly one in three respondents to the America Saves survey is not setting any money aside at all, up from about one in four in the 2010 version of the questionnaire. Only 35 percent of respondents described their progress toward personal savings goals as “excellent” or “good,” with 63 percent making “fair” progress or none at all. Just over half of all respondents say they are building wealth reserves through equity in a home or other piece of property, compared to 68 percent in 2010.
The survey also revealed a clear point on the income scale at which saving money seems to become significantly harder. While four out of five households with income over $50,000 are managing to save money, just 69 percent of those making between $25,000 and $50,000 are able to save money. That breakpoint is quite close to 2013’s median household income level of $52,098, meaning that roughly half the country falls into the latter group.
An optimist might say that it’s a positive sign that 70 percent of low- and middle-income households saving money is a positive sign. But other economic data casts the figures in a bleaker light. About two thirds of all American workers are racking up debt faster than they accumulate savings, according to a report from last fall. Consumer debt started growing again last year as post-recession belt-tightening gave way to renewed borrowing and total household debt rose by almost a quarter-trillion dollars in the last three months of 2013 alone. Alongside the surge in borrowing, the savings rate has fallen by a third for those workers who manage to set anything aside at all. The total savings gap between what workers need to retire and what they actually have stands at $6.6 trillion, leading many experts and policymakers to warn of a retirement crisis.