Americans' Savings Keep Growing Fatter in Lean Times

(MoneyWatch)  After gorging ourselves on enough home-equity, credit-card and auto-loan debt to choke Jabba the Hut, many of us are feeding our savings accounts more in tighter times than reveling in wanton, unbridled consumption.

Americans' personal savings rate rose to 3.3 percent last month from 2.8% in August, the Bureau of Economic Analysis (BEA) reported today. Total personal savings for the month rose to $355.6 billion -- up $215.3 billion from a year earlier when the savings rate was just 1.3%.

September's U.S. consumer-spending report, also released today by the Commerce Department, confirmed our newfound frugality. Spending fell for the first time in five months with the passing of the "cash-for-clunkers" program. That federal auto-rebate offer succeeded in boosting spending for several months because, let's face it, U.S. consumers just love a deal.

Last month's savings rate is far from the minimum 8% to 10% that financial planners generally recommend. Still, it's more than double the rate of 12 months earlier, indicating that debt-addled profligate spending has given way to greater financial discipline.

"Personal savings clearly continues to be a priority for the vast majority of Americans, many of whom are still concerned about the overall state of the economy and their individual financial stability," said Cathy Weatherford, chief executive of the Insured Retirement Institute (IRI).

The savings rate includes money steered into retirement-savings plans, and in that respect, it's falling woefully short. The IRI said less than one in four Americans are very confident they'll have saved enough to live the life they'd like to in retirement.

If you're among the 75% unsure of the retirement awaiting you, you need to buck up and save all you possibly can in both good times and bad.

"Economic times are still tough and, for many, saving money is the last item on their financial agenda," Weatherford said. "But in times like these, retirement savings is more important than ever, and long-term financial stability can - and must - remain a top priority."