Am I saving enough?
To most Americans, this is a luxury question. One that was further amplified by the recent global pandemic and the accompanying destabilization.
Even though on paper, the U.S. savings rate is at an all-time high in 2021, the reality of America’s struggle to save tells a different story.
Did you know that 44% of the American households, surveyed by the Federal Reserve Board in 2017, reported not being able to cover a $400 emergency expense?
Let’s find out if things have changed.
Note on mean vs. median: When a median value is significantly less than the mean (a.k.a average), it means a large number of people have less than the average, and so the median is a better gauge of who has what when it comes to money and income.
As the COVID pandemic has shown, not having an emergency fund to cover three, let alone six or more months of your living expenses, meant being put into a very difficult situation.
We hope these stats will urge you into saving more, if your income allows it.
Let’s start with a few interesting key stats:
- Americans have over $3.9 trillion in personal savings
- 69% of adult Americans have less than $1,000 in a savings account
- 65% of Latino and 59% of African-American households don’t save for retirement
- Only 30% of Americans have a financial plan that includes savings
- 87% of Americans say the COVID pandemic changed their finances for the worse
- Median savings of college grads is 84% higher than that of high-school grads
How much does the average American have in savings?
1. The average savings for the U.S. is $17,135
(Source: PR Newswire)
The most recent survey, conducted by a leading social platform for shopping, has the national average figure at $17,135 in savings or investment accounts, as of November 2020. With New Yorkers leading the charge and stashing away 14.5% of their income towards savings.
When it comes to actual amounts, South Dakota leads the States with $24,497, while good ol’ West Virginia is at the bottom with $6,936 in average savings or investments.
The last official survey of consumer finances, conducted by the Federal Reserve, was released in 2019 and showed that the weighted average bank account balance (in 2019) was $41,700 and the median was $5,300.
It’s a triennial survey, so the next report should be released in 2022.
2. The median amount of savings for American households is $3,500
(Source: The Ascent)
Another survey of 2,000 Americans states that over 70% of Americans have savings accounts.
How much is inside them?
According to the survey, the median figure is $3,500. The big gap between the median and mean dollar figures are caused by the (relatively few) people with over $100,000 in savings, which bring the mean (average) up.
Simply put, the $3,500 is more in line with the average, non-retirement, savings balance of an American.
3. 69% of adult Americans have less than $1,000 in a savings account
(Source: GOBanking Rates)
Perhaps the most disturbing figure comes from a 2019 savings survey by GOBanking Rates. In it, 69% of Americans reported having less than $1,000 in savings, an 11% increase from the 58% in 2018.
Even more alarming is that almost half of the respondents (45%) reported having absolutely nothing ($0) in their savings account that year.
With average household expenses well above a thousand dollars, a great deal of Americans are an emergency away from going back to $0 in savings, and perhaps even getting into more debt.
4. Over 50% of women have no savings at all
(Source: GOBanking Rates)
Over half of U.S. women reported having nothing in savings. About 23% said they had less than $1,000 saved up, and only 5% of the women surveyed reported having $50,000 or more in savings.
Additionally, an astounding 38.31% of women said they were living paycheck-to-paycheck, vs. the 26.70% reported by their male counterparts.
5. The average withdrawal due to COVID is $3,139, while the median is $1,000
(Source: The Ascent)
The global pandemic was an absolute wrecking ball for the average American’s emergency fund.
Even though the pandemic decreased expenses like eating out and spending on gas, many people lost all (or portions) of their incomes in turn. The median amount withdrawn from savings was reported at $1,000 while the average was $3,138.79.
Given that the average emergency fund in 2020 was reported at $2,000, Americans had to deplete them by half to keep up with expenses during the pandemic.
What is the average American saving for?
6. 38.1% of American families are saving for liquidity purposes
Liquidity continues to be the driving factor for saving money among families in the U.S., with 38.1% of respondents citing this as their primary reason.
If you’re not familiar with this term, it basically means they’re keeping their savings in cash, ready to be withdrawn when in need.
A mere 1.8% of people said they’re saving for investments.
7. 5.1% of Americans are saving to buy a house
Just a little over 5% of Americans are putting money away in hopes of buying their own home.
In spite of this low figure, homeownership rates in the US are on the rise again. Having peaked in 2004 at 69.2%, and bottoming out in 2016 at 63.7%, they have since been on an upward trend and now sit at 65.8% of owner-occupied households.
8. 56% of American parents are saving for their child’s college education
(Source: Sallie Mae)
Two-thirds of parents were committed to saving for their child’s education, according to Sallie Mae’s national study of parents with kids under the age of 18.
The majority of the savings are held in dedicated college-savings plans, with 529 college savings plans accounting for 30% of all college savings; prepaid estate plans hold 8%.
9. The median balance of retirement accounts in the U.S. is $65,000.
(Sources: The Federal Reserve, Fidelity)
Considering 22% of the US population will be 65 or older by 2050, this is a pretty important figure.
According to the Fed’s 2019 report, whilst the average balance of all U.S. retirement accounts sits at $255,200. The median value, however, is almost four times lower at $65,000.
And according to Fidelity, on average, a 65-year old couple who retired in 2020 are expected to spend $295,000 in after-tax medical expenses and general healthcare throughout retirement. This is in addition to the annual costs of a private room in a nursing home, which in 2020 was averaging at $105,852, according to long-term care insurer Genworth.
Average American savings by age and household type
10. Average bank account balance by age:
(Source: The Federal Reserve)
|Age Group||Median Balance||Mean Balance|
|35 to 44||$4,700||$27,900|
|45 to 54||$6,300||$48,200|
|55 to 64||$5,700||$57,800|
|65 to 74||$8,000||$60,400|
|75 or older||$9,300||$55,600|
The above is obtained from the official 2019 Survey of Consumer Finances conducted by the Federal Reserve on a triennial basis, with almost 5,800 weighed responses. It only represents those households that had active accounts at the time of the survey.
11. People aged 45–54 have higher median household savings than people aged 55-64
(Source: The Federal Reserve)
As one would typically expect, older households tend to have both a higher median and a higher average balance than their more youthful counterparts.
Though this median trend holds across the board, there is one exception. Age group 45 to 54 showed a higher median savings balance ($6,300) versus age group 55 to 64 whose median figure was $5,700.
12. Millennials are saving more than older generations
(Source: Bank of America)
According to a recent report by the Bank of America, millennials are . . . saving?! At a much earlier age, and in great numbers too.
Even though they’re juggling substantial debt obligations, an impressive 73% of American millennials report saving, as early as 24.
Their primary reason for saving is listed as retirement, with 75% of millennials stashing money away for it. About 51% are saving to build an emergency fund, and 32% are saving up to buy their own first (or different) home.
13. People aged 30–39 have $461 billion in student debt
Total student loan debt towers at $1.52 trillion distributed across 44.7 million borrowers.
Those in the 30 to 39 age group account for the majority share, at $408.4 billion owed. Thus, even though the millennials are saving more, they’re also weighed down by student loans.
Gen-Z (under-30 group) is right behind them with $376.4 billion owed. It’s no wonder the ‘cancel student loans’ political movement is so popular among the youth.
14. 60% of Americans don’t have enough saved to retire comfortably
The U.S. Retirement Survey conducted by Schroders revealed that just 4% of the already retired Americans are “living the dream” in their Golden Years. Whilst only 18% of the non-retired respondents aged 60-67 think they’re properly prepared for such retirement.
Things aren’t so rosy for about 62% of the respondents, who plan to keep working past the standard retirement age of 65. With 53% of respondents listing “to cover my basic living expenses,” as one of the main reasons.
Other reasons include higher than expected healthcare costs, lack of savings, and feelings of uncertainty.
15. Median savings of college grads is 84% higher than that of high-school grads
(Source: The Federal Reserve)
Those who graduated college had a reported median balance of $15,400, while those with only a high school diploma had a median of $2,500. The mean is also significantly higher, with the college grads’ mean bank account balance standing at $79,100 and $20,100 for their high-school diploma counterparts.
The difference can be attributed to more high-paying career opportunities for those with higher education.
Unfortunately, given the rising cost of higher education in the States, and the current student loan situation, those with only $1,000-$2,500 in their bank accounts face tough odds.
American saving stats by race and ethnicity
16. More than half of Latino and African-American households don’t save for retirement
Over half of Hispanic and Black households have no retirement savings whatsoever. With only 35% of Hispanic families and 41% of Black families age 32-61 having retirement account savings.
Of the ones who do have retirement accounts, the median savings for families age 32-61 for Hispanics was $23,000 and $29,200 for Black families respectively.
17. White households between ages 32 and 61 have median retirement savings of $79,500
Driven by average higher-incomes and compensation benefits that come with it, White households have almost three times as much in their retirement savings than the median Hispanic and Black families.
According to the Economic Policy institute, this demographic’s retirement savings have also rebounded the most since the Great Recession.
18. American-Asians born abroad save or invest 47% of their monthly income for retirement
(Sources: NCRC, Prudential Financial)
While the general population of U.S.-born Asian-Americans is 10%, they set aside 36% of their income for retirement. This makes Asian-Americans, who have the highest median income in the U.S., the most retirement conscientious demographic.
Their annual household median income was $87,194 in 2018, which is 38% higher than the national median of $63,179.
But they are also the most economically divided racial group in the U.S., with Japanese, Filipino, Indian, and Chinese Americans driving their median wealth and median annual income north.
Still, roughly 53% of overall Asian-Americans have a bachelor’s degree or higher, compared to the 27% national average. And they only spend 20% of their monthly income on necessities, versus the general population’s spending figure of 46%.
Why aren’t some Americans saving at all?
19. 38% of Americans not saving, say they can’t do so because their expenses are too high
Roughly 21% of Americans aren’t setting aside money for retirement, emergencies, or other financial goals.
The consensus on why American’s aren’t saving? Too many expenses.
Listing out their biggest reasons for not saving more money, working Americans responded that they had high expenses (38%), haven’t gotten to it (16%), their job isn’t good enough (16%), and debt (13%).
A lucky 8% say they don’t need to save more.
20. 87% of Americans say the COVID pandemic changed their finances for the worse
(Source:s Pew Research Center, PR Newswire)
The global pandemic has dramatically changed people’s lives and routines. In Pew’s survey, the negatives clearly outweigh the positives.
More than 1-in-5 Americans cited money problems resulting from the pandemic, with 33% saying they had to tap into their savings to cover the day-to-day expenses.
Just 13% of Americans mentioned positive financial changes, with many framing it as an opportunity to save money.
Another survey commissioned by Slickdeals found that all of this resulted in over 60% of Americans stating the pandemic has forever affected the way they budget and spend. Experiencing the money problems that came with the pandemic has caused many people to re-evaluate their long-term budgets, emergency funds, and spending habits.
21. Only 30% of Americans have a financial plan that includes savings
It all starts with a plan, right?
For two-thirds of Americans, that plan has yet to be formed. No budget for retirement, for emergencies, for investing, etc.
Though the Gallup poll did reveal that there does seem to be a threshold, it suggests that those making $75,000 and over are more likely to budget than those who don’t.
Do the numbers tell the whole story?
(Sources: Barron’s, FRED, BEA)
Sometimes taking a number at face value will not tell you the whole story.
For example, the U.S. personal savings rate for April 2020 was at an all-time high of 33.7%. That’s easily the highest it’s been since 1975 (17.3%); currently, it’s hovering around 14% in 2021.
How do you square this up with all the worrying American saving statistics from above? It’s because savings rates tend to go up during recessions, and COVID-19 was no different.
That being said, don’t forget to ask yourself, what the meaning of this increase is and for whom?
For example, Barron’s reports that Americans have over $3.9 trillion in personal savings, and that $1.3 trillion of this can be attributed to the COVID-19 lockdown. That’s a sizeable figure, and if it were to be put back into the economy all at once, it would be equal to 9% of all consumer spending of 2019.
But will it? And how evenly spread, or concentrated are these savings?
As we can infer from the stats above, the majority of people simply were not in a financial position to have such a drastic increase on the overall amount in personal savings. Especially as the disposable personal income fell due to COVID.
The increase in the savings numbers can be attributed to a combination of government stimulus and higher-income people being able to keep their jobs while being forced to spend less due to lockdowns.
Note on the numbers used in the article: In an effort to paint a fuller picture, the figures in this article were aggregated from numerous credible sources, who reported the results of their surveys at various points in time.
Do these statistics on the average savings of Americans make you want to start saving more?
We sure hope so.
Life comes at you fast, and some things you just can’t predict: illness, accidents, car problems, job loss, etc.
Saving for retirement is important, building an emergency fund for the unforeseeable even more so. If you can’t do both, do one first, then work on the other. This isn’t the type of stuff they teach you growing up, but it’s never too late to change your ways for the better.
PR Newswire | The Ascent | GOBanking Rates | Statista | Sallie Mae | The Federal Reserve | Fidelity | Bank of America | ValuePenguin | BusinessWire | Economic Policy Institute | NCRC | Prudential Financial | Bankrate | Pew Research Center | Gallup | Barron’s | FRED | U.S. Bureau of Economic Analysis