Americans searching for ways to boost savings
The "new normal" of stagnant wages and slow job growth may be behind a trend that finds that more Americans are struggling to set aside money in case of a financial emergency, according to a new report.
The 7th Annual Report on Savings from the Consumer Federation of America, an association of non-profit consumer
organizations, found that a third of Americans reported making steady
progress on meeting their savings goals. Some 68 percent say they are at least paying their bills and putting a little money aside, up from 65 percent in 2013. The number, however, is lower than it was
in 2010, when 73 percent of Americans were able to add to their savings.
"Individuals
continue to become more realistic about the need to save and plan
themselves, rather than assume it will be done for them," Dallas
Salisbury, chairman of the American Savings Education Council, said
in a statement. "Increased knowledge about the Social Security and
Medicare programs, as well as the potential costs of long term care,
and longevity risks, continue to dampen expectations for an early and
golden retirement."
Steve Brobeck, Executive Director of the CFA, said while it is good news that Americans are setting some money aside, most are not saving for the long haul. "They're not really well prepared for the long term," he said.
Brobeck said a good rule to follow is to set aside at least 10 percent of every paycheck. "First of all build up an adequate emergency fund, and then start saving for retirement."
The survey also showed that fewer middle class families are able to build wealth through home ownership. A little more than half of all respondents said they were building equity in their home or other property, down from 68 percent just four years ago. Also, the proportion of homeowners expect to pay off their mortgage debt before they retire fell from over 78 percent in 2010 to only 68 percent today.
The report was issued in conjunction
with the start of America Saves Week, an annual campaign by the CFA
to educate Americans to save money, reduce debt and build wealth.
