20 silver statistics that will blow your mind
Americans do a pretty bad job of saving their money, both in terms of saving for retirement and saving for rainy day expenses. The extent of the problem may surprise you – take a look at some of the statistics.
Bad savings habits
Overall, Americans just don’t like saving money for any reason. Some people have legitimate reasons for not saving a lot – for example, using extra cash to pay off credit card debt or student loans. However, others just like to go out to eat, buy new clothes, and do other expensive activities much more than they should.
Whatever the reasons, our saving habits are just plain bad. The statistics don’t paint a pretty picture:
- 42% of American workers live paycheck to paycheck, including 25% of those earning more than $ 100,000 a year.
- 29% of American workers have less than $ 1,000 in savings.
- Half saved less than a month of income.
- The personal savings rate in 2014 was only 4.4%, which means that for every $ 1,000 earned, the average American spent everything but $ 44.
- Millennials have a savings rate of negative 2%, thanks to factors such as high student loan debt and skyrocketing rent prices.
- About 10 million American households have no bank accounts.
But we really like to pass
The excuses many people have for not saving include things like, “I haven’t had a raise in years as my cost of living continues to rise. This can be true in many cases, but one of the main reasons we don’t save money is simply because we like to spend our money.
- The average American household has a total debt of $ 117,951.
- There are nearly 1.9 billion active credit card accounts in the United States, spread among 199.8 million cardholders. That’s almost 10 per consumer. Keep in mind that this figure includes business credit cards, as well as personal cards.
- Total credit card debt in the United States is $ 793.1 billion.
- Americans spent $ 70 billion play the lottery in 2014. It’s about $ 300 per adult.
Emergency fund? What is that?
Experts say you should have six months of living expenses in an easily accessible emergency fund. And it can be a lot more than you think. While six months is an ideal emergency fund, many people don’t even have a fraction of that amount.
- 52% of Americans couldn’t cover an unexpected $ 400 expense without borrowing money or selling something.
- Only 17% of the population has an emergency fund that could last three to five months.
- 2.5 million Americans took out car title loans in 2014 to cover their expenses – one of the worst types of debt ever.
The pension crisis is real
Social Security is by no means sufficient to ensure a reasonable quality of life after retirement, but too many Americans are putting nothing aside for their future. As a general rule, you should anticipate that you will need 80% of your pre-retirement income in order to maintain your lifestyle into your senior years; if you’re making $ 100,000 a year now, you’ll need $ 80,000 a year from social security and your savings. As you can see, most Americans don’t even come close to this benchmark.
- Only 18% of Americans are “very confident” that they have enough savings for retirement.
- In order to withdraw $ 5,000 per month for 30 years, you will need to have $ 1,060,751 in retirement savings, assuming an annual return of 6% and inflation of 2%.
- Unlike the previous statistic, the average 50-year-old saved only $ 42,797.
- 36% of Americans don’t save at all for retirement.
- 93% of American workers have access to a 401 (k) or similar pension plan.
- But only 67% contribute enough to their 401 (k) to take full advantage of their employer’s matching contributions.
- If you wait to start saving until age 45, you will need to set aside three times as much each month to retire comfortably than someone who started at 25.
Do something about it
If one or more of these statistics describes you, now is a great time to do something about it. Start small. For example, put $ 50 in a paycheck into an emergency fund or savings account until you have a decent cushion. Or maybe increase your 401 (k) contributions by just 1% of your salary each year until you are able to build the retirement nest egg you need. You might be surprised what impact just a small increase can have.