Comments on: America– a nation of savers?

By: mike d

mike d — Mon, 30 Jun 2008 17:31:43 +0000

I just plain old don’t pay attention to those reports, because they just seem so incomplete. Making a single data tick seeming even less important. My ears perk up more when I see the average/median sums in a retirement account given a certain age. Sure, not everyone has one, so that’s not a perfect measuer either. But for those that DO have one (or access to one), how much do they have? What percentage of their income have they saved? What’s the average paycheck contribution? These are things I’d like to know - and not just for the baby boomers, but for the two generations after. Has the news about Baby Boomers not saving enough hit home with Gen X and Gen Y?

By: bsimon

bsimon — Fri, 27 Jun 2008 19:07:40 +0000

Kara writes
“Today, I saw an eye-rubbing, is-this-a-typo savings shift. Personal savings as a percentage of disposable income was 0.4 percent in April. In May it was a whopping 5.0 percent!”

One data point has more potential to be a statistical outlier than a new trend. Not to be the cyinical one, but perhaps it is too soon to celebrate. Worth noting: yes. But drawing a conclusion is jumping the gun. Kind of like the people who said we’d already hit botton in the real estate market.

By: David

David — Fri, 27 Jun 2008 18:37:48 +0000

Fun debate for a Friday! We know far more people that cannot save due to their choices than we know people who cannot save due to circumstances beyond their control. The student that gets C’s should be aiming lower…less competitive college or job where grades don’t matter…just like those who don’t save enough will have to adjust their expectations of their retirement lifestyle. The difference is that the kid has plenty of time to make up for their poor choices - whereas the retiree does not have time on their side. There is notion that you can somehow “catch up” and hit the home run later in life. Nice to think about…happens to a few…yet statistically unlikely.
Agree that scare tactics don’t work - people don’t look at their budgets, retirement savings, etc. because they don’t want to confront reality - it’s kind of a dirty job that may lead you to believe that life is a series of trade-offs.

By: Kara McGuire

Kara McGuire — Fri, 27 Jun 2008 17:23:28 +0000

Geez you guys. We are making progress. You don’t tell a kid who has been getting F’s that his C isn’t good enough because college is so competitive these days and he’ll never be able to afford it because no one will give financial aid to such a bad student.

You say, look, you’re making progress, but I know you have it in you to do better.

Finding a retiree who is feeling the effects of inflation is not going to get most of us to start saving more. Many people can’t afford to save more.

Plus, I don’t think scare tactics work. OK, maybe those smoking ads with a person on her deathbed or the one where your face gets all wrinkly were effective…..

By: David

David — Fri, 27 Jun 2008 17:16:32 +0000

I’m with Ryan (and I am not a planner) - we should all talk to someone who is in their 70’s and is paying for their health care and drugs beyond medicare. You might be scared. Frightened even, if you consider that medicare and ss will most likely be “means-tested” away for those who did save.

By: Ryan

Ryan — Fri, 27 Jun 2008 16:11:44 +0000

“These payments reduced personal current taxes and increased government social benefit payments. As a result,
disposable personal income increased substantially. Excluding these special factors, which are discussed more fully below, disposable personal income increased $46.4 billion or 0.4 percent in May, after increasing $16.6 billion, or 0.2 percent, in April.”

I’d say, Americans aren’t saving enough to keep up with inflation.

Thanks,
-Ryan