Data & Research February 25, 2008

Americans Need to Increase Saving, Group Says

More than half of Americans save less than 5% of their income, but the majority (57%) of Americans not yet retired still believe they are socking away enough of a nest egg to pay for “a desirable standard of living.″

Reported by

Fred Schneyer

A new survey taken in connection with the kickoff of the second annual America Saves Week reported that only 55% of the nonretired respondents reported having the ability to “save for retirement at work through a 401(k) or other contributory plan.’ Among the non-retired population, 77% of the high-income (incomes $75,000 and over) group and only 24% of the low-income (incomes below $35,000) group reported participating in a retirement plan at work.

Nearly three-quarters of Americans (73%) reported that they “spend less than their income and save the difference,” but little more than half of them (53% of all respondents) said they save at least 5% of their income and only 28% say that they save at least 10% of their income. However, more than two-thirds of respondents (71%) reported that they “have sufficient emergency savings to pay for unexpected expenses like car repairs or a doctor visit.”

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Among those not retired, 85% of the high-income group and 28% of the low-income group said they are saving adequately for retirement.

Among all households in 2005, about one-quarter (27%) were high-income (incomes $75,000 and over), one-third (33%) were middle-income, and two-fifths (40%) were low-income (incomes below $35,000).

America Saves Week

“Our central message of “Build Wealth Not Debt’ seems all the more desirable as the economy continues to face its challenges,” said Dallas Salisbury, President of the Employee Benefits Research Institute (EBRI) and Chairman of American Savings Education Council (ASEC), in a press release.

The focus on the importance of saving – including for retirement – Salisbury asserted, “is about moving to fill in the action gaps that have our nation high on debt and low on savings.”

More than 80 governmental, non-profit, and industry organizations sponsoring the PR campaign to encourage savings kicked off the 2008 event with a news conference Monday at which they unveiled the new America Saves Week Web site. The site provides a savings checklist, linked Web pages for checklist items, monthly savings messages, saver enrollment, video messages, and other tools.

More information can be found on The America Saves Week Web site, located at http://www.americasavesweek.org/default.asp