The fifth annual national survey assessing household saving revealed that — despite hopeful macroeconomic signs — an increasing number of Americans are having difficulty saving to meet goals ranging from meeting emergencies to affording retirement. Over the last three years, the number who spend less than their income and save the difference, are building home equity, have adequate emergency savings, and think they are saving enough for retirement has declined.  However, the survey also revealed that having a savings plan has beneficial financial effects, even for lower-income families.

The survey was released to kick off “America Saves Week,” (Feb. 19-26) an annual effort by hundreds of national and local organizations to promote good savings behavior. America Saves, managed by the Consumer Federation of America, the American Savings Education Council and the Employee Benefit Research Institute, coordinate the event.

The survey also reveals that two-thirds of Americans (66%) spend less than their income and save the difference, and two-thirds (66%) "have sufficient emergency saving to pay for unexpected expenses like car repairs or a doctor's visit."  Yet, fewer than half (42%) say they have "a savings plan with specific goals," and slightly more than half of the non-retired (52%)  think they are "saving enough for a retirement in which [they] will have a desirable standard of living."

"The recession clearly has not ended for millions of American families, especially those with lower incomes," says Stephen Brobeck, CFA Executive Director and a founder of America Saves. "Many working families are still apparently suffering from the high unemployment rate, stagnant incomes, and a depressed housing market.”

The survey clearly shows, however, that having a savings plan with specific goals can have beneficial financial effects, even for lower-income families. Those with incomes below $25,000, about one-quarter of all households, are least likely to have a savings plan (25%), spend less than their income and save the difference (38%), have sufficient emergency savings (38%), think they were saving enough for retirement (15%), save for retirement at work (10%) and are building home equity (35%). On the other hand, those with incomes above $100,000 are most likely to save at least 10% of their income (59%), think they are saving enough for retirement (83%) and save for retirement at work (81%).

"The heightened public fear about job prospects and stability has changed the way people are approaching many aspects of planning and saving," says Dallas Salisbury, EBRI president and CEO, "which is good news for saving and personal responsibility, and bad news for consumption, debt, and economic growth."

America Saves Week, is an annual opportunity for organizations — nonprofits, government agencies, financial institutions and employers — to join together to encourage individuals and families to take financial action. “Organizations have embraced this year’s theme ‘Set a Goal. Make a Plan. Save Automatically.’ to help people take actionable steps,” says Nancy Register, America Saves director and CFA associate director. “From incentivized savings accounts to motivational workshops and financial education sessions, these organizations are helping people improve their financial situation.”

“We know that people save better when they have a savings plan,” said Ken McDonnell, ASEC program director, “which is why we are excited to see that so many employers are helping people reach their financial goals during the Week by encouraging employees to contribute to work retirement plans and saving through direct deposit.”

— Additional reporting provided by EBA Associate Editor Marli D. Riggs.

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