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Saving money is a foundational habit—one that’s crucial to reaching big financial goals without going into debt. And while the average savings account balance soared during the early days of the pandemic, things look different now. Even though interest rates have increased dramatically in the past couple of years, personal savings rates haven’t kept pace. However, there are many factors affecting an individual’s ability to save, and evidence suggests many want to save more than they are.
Read on to learn more about current savings statistics and trends among Americans in 2023.
- Total U.S. personal savings amounted to $802.1 billion as of April 2023. The personal savings rate (personal savings as a percentage of disposable personal income) was 4.1%.
- Excluding retirement assets, the average American has $65,100 in personal savings, according to a 2023 Financial Planning & Progress study from Northwestern Mutual.
- From 1971 to 2023, interest rates averaged 5.42%. Interest rates reached an all-time high of 20% in March 1980 and a record low of 0.25% in December 2008.
Average Savings Statistics
A Forbes Advisor survey of savings habits conducted in March 2023 found that two-thirds (66%) of Americans said they were able to save money in the past year. Increased interest rates (50%) and pay increases (35%) were the most common factors helping respondents save.
The uncertain state of the economy motivates many to save, but this is only one way people are attempting to protect themselves. A 2023 report from Northwestern Mutual found that Americans are taking three major steps to address economic uncertainty: Nearly 64% of respondents are cutting costs, 50% are building savings and 41% are delaying large expenses. Each household often utilizes multiple strategies at a time.
Still, Americans face many barriers to saving and are putting away less of their income overall. According to data from the St. Louis Federal Reserve, personal savings only accounts for 4.1% of disposable personal income as of April 2023. That’s well below pandemic highs of 33.8% in April 2020 and 26.3% in March 2021 and lower than the savings rate a decade prior, 6.2% in April 2013.
And while savings interest rates are at a 15-year high, many Americans may find it difficult to take advantage of these competitive rates in the current economic environment.
Average Savings Account Balances of Americans
Transaction account estimates can shed light on the overall banking balances of Americans. Data collected in 2019 for the Federal Reserve Board’s Survey of Consumer Finances shows a median transaction account balance of $5,300. Note that for the purposes of this study, transaction accounts include savings, checking, money market, call accounts and prepaid debit cards. Because this figure accounts for both saved and spending money, it’s not an accurate representation of savings balances alone.
In 2022, the national per capita disposable personal income was $55,832 and the personal savings rate was 3.6%. Based on this data, Americans were able to save roughly $2,010 per person last year.
Data from Northwestern Mutual’s 2023 Financial Planning & Progress Study found that the average American’s personal savings (excluding retirement assets) stand at $65,100. Although nearly a 5% increase over the $62,000 reported in 2022, that’s still a decrease from the average savings account balance of $73,000 reported in the same survey in 2021.
Are Americans Utilizing Interest-Bearing Accounts To Boost Savings?
Interest-bearing accounts—especially high-yield savings accounts—boost savings by paying account holders interest on their balances. Recent interest rate hikes have made these accounts especially attractive to Americans looking to save more.
According to a Forbes Advisor survey conducted in March 2023, almost half (48%) of respondents have opened a high-yield savings account and 41% of this group did so to take advantage of interest rate hikes. But not everyone is jumping on the bandwagon. In fact, 43% of survey participants have never opened a high-yield savings account.
Competitive interest rates can also be found in certificates of deposit or CDs. The same Forbes Advisor survey showed that 44% of respondents have opened a CD and 31% of this group did so to take advantage of rate hikes. On the other hand, 41% of respondents have never opened a CD.
The data shows that while a sizeable percentage of people are taking advantage of high-interest accounts, almost the same percentage of people are not.
Emergency Savings Statistics
While saving for retirement and other goals is important, so is saving for potential emergencies. Emergency savings prevent you from having to take out a loan or use a credit card to cover unexpected expenses. Unfortunately, not all Americans are financially prepared for an emergency.
According to the Making Ends Meet Survey and Consumer Credit Panel from the Consumer Financial Protection Bureau (CFPB) conducted in 2022, 24% of Americans don’t have any money saved for emergencies. And while 37% reported having at least a month’s worth of income in emergency savings, 39% reported having less than this.
Setting money aside for emergencies can have a significant impact on overall financial well-being, and data suggests an upward trend in emergency preparedness in the U.S. A 2021 report by the Federal Reserve on the economic well-being of U.S. households found that adults who said they could cover a small emergency expense using cash increased to 68% in 2021, up from 50% in 2013.
Average Emergency Savings
How much you should save for emergencies depends on a number of factors, but many Americans are saving $5,000 or less. The Transamerica Institute found the median emergency savings to be $5,000 as of late 2021, with over a third (34%) of Americans reporting saving less.
A few thousand dollars could help in many situations, but it may not be enough if you’re faced with back-to-back emergencies—or one very costly one.
How Much Emergency Savings Should I Have?
As a general rule, experts suggest keeping at least three to six months’ worth of living expenses in an emergency fund. But the ideal amount of emergency savings for you depends on your expenses and financial situation, and certain risk factors may require you to save more. For example, if you have dependents, low job security or a fluctuating income, a larger emergency fund could be helpful.
If you can’t save three to six months’ worth of expenses right away, save what you can now and contribute more when you can afford to. Starting somewhere is better than not starting at all.
Savings Statistics by State
Whether you realize it or not, where you live may have an effect on your savings balance. Savings habits vary by state, partly because it’s easier to save in some states than others.
According to a Forbes Advisor study of the worst and best states to save, many states in the Northeast are among the most difficult for saving while Midwest states are some of the easiest.
The study found that the top five worst states for saving money are:
- New York
- New Jersey
Conversely, the top five best states for saving money are:
- North Dakota
- South Dakota
- West Virginia
Which States Are Saving the Most and Least Money?
Just because it’s easier to save in certain states doesn’t mean residents are actually saving more—and vice versa. In fact, the states with the highest average savings account balances aren’t the states where it’s easiest to save:
States Saving the Most Money
- District of Columbia
- New Jersey
And the states with the lowest average savings aren’t the states where it’s hardest to save:
States Saving the Least Money
- West Virginia
Retirement Savings Statistics
As of September 2022, the Investment Company Institute found that 401(k) plans hold a combined $6.3 trillion in assets in across 625,000 plans. This encompasses millions of participants and retirees.
According to further data, while around three-fourths of non-retired adults were found to have some retirement savings, 28% had none. Unfortunately, this percentage was up from 25% in 2021.
401(k) plans aren’t the only place Americans are stashing retirement savings. While 54% of non-retired adults have their retirement savings in defined contribution plans like 401(k) or 403(b) plans, 47% have retirement savings outside of formal retirement accounts.
And just because money is earmarked for retirement doesn’t mean it never gets spent on other things. An economic well-being survey of U.S. households conducted by the Federal Reserve in 2023 found that 8% of non-retired adults tapped their retirement savings to cover an emergency in 2022.
What Is the Average Retirement Savings?
Average savings vary by age. This makes sense not only because savings ideally grow over time rather than shrink, but also because people usually earn less early in their careers than they will later on.
According to data from the Empower Institute in 2022, the average 401(k) account balance is $118,781 across all ages. However, the median account balance is much lower—only $32,689 across all ages. The average balance increases with each subsequent age group until the 60 to 65 age group, when many workers retire and begin to make withdrawals from their 401(k)s.
How Much Retirement Savings Should I Have?
The amount of money you need to save for retirement depends primarily on your life expectancy, the age at which you’ll retire and your spending habits.
An analysis by Fidelity Investments provides some general guidelines for defining this. These guidelines suggest you should have one times the amount of your salary saved by age 30, three times by age 40, six times by age 50, eight times by age 60 and 10 times your salary by age 67.
According to Fidelity, these figures assume you save at least 15% of your income annually starting at age 25, invest an average of 50% of your savings in stocks over your life and plan to retire at age 67 without inflating your lifestyle in retirement.
How To Maximize Retirement Savings
The average U.S. retirement savings balance in a 401(k) plan is $118,701, but the median is only $32,689. This means many individuals likely fall short of the targets laid out above. Especially for those not saving enough, it’s important to understand how to maximize retirement savings.
The sooner you start saving for retirement, the more likely you are to retire with enough—or more than enough—cash to cover your expenses. If you’re one of the 28% of non-retired Americans with no retirement savings, start saving today.
Aside from starting as early as you can, here are a few tips for maximizing your retirement savings:
- Contribute enough to your workplace retirement plan for employer matching. If your employer offers a match on retirement contributions, don’t let that free money slip away. Contribute at least as much as you need to receive the full match. For example, if your employer matches up to 5% of your salary, contribute at least 5%.
- Contribute to other tax-deferred accounts. In addition to using your workplace retirement plan, there are other accounts you can open to build retirement savings. Consider a traditional IRA, Roth IRA or health savings account (HSA) for tax-advantaged savings. If you’re maxed out on these accounts, you can always funnel extra savings into a taxable brokerage account.
- Make catch-up contributions if you’re over age 50. When you reach age 50, the IRS allows you to make extra contributions to your retirement accounts, including both 401(k) plans and IRAs, to help bolster your savings. If you started late or fell behind with your retirement savings, you can get back on track by making catch-up contributions up to the annual limits.
American Savings Trends
A January 2023 survey by Forbes Advisor on financial regrets and successes uncovered interesting data about U.S. consumer savings trends. It found that the most common financial habit Americans planned to adjust in 2023 was tracking spending/creating a budget (43%). Americans also indicated wanting to save more and spend less. The next three most popular responses participants gave were spending below their means (40%), paying down debt (37%) and adding to emergency funds (25%).
This survey also found that 56% of Americans who experienced financial regret in 2022 cited not saving more money as one of their top three misgivings. Meanwhile, 57% of Americans who experienced financial success named increasing their savings as one of their top three triumphs.
Forbes Advisor also conducted a survey in March 2023 to analyze how often Americans save and what methods they use. When it comes to putting the habit of saving into practice, 44% of Americans use recurring transfers to save automatically, 38% allocate a portion of their pay directly into a savings account and 35% manually transfer their funds. Some use a combination of methods to save.
Current Savings Account Rates
Research suggests that interest rate hikes encourage Americans to save. But even though savings account interest rates have been on the rise, they still vary widely from bank to bank. Below is a look at national interest rates as of June 20, 2023.
How To Start Saving Money
With a dramatic drop in Americans’ personal savings rates over the past couple of years as well as clear indications that many want to save more, there’s no doubt that saving is easier said than done.
Saving is important for achieving financial freedom and confidence. This requires little convincing, but it can be difficult to know where to start. Use these tips to cut down costs and boost your savings:
- Pay off high-interest debt first. The less money you need to throw at your debt, the more you can funnel toward your savings goals. Start by paying off your high-interest debt first, including credit card debt and loans, because it is often the costliest. Try to make more than the minimum payments and focus on the debt that costs you the most first.
- Track your spending and create a budget. If you’re not already using a budget, try it now. Start by tracking your spending to see where your money goes each month. Based on this information and your savings goals, create a budget that includes all of your income and expenses. Look for areas where you can redirect spending toward savings and debt payoff.
- Automate savings wherever possible. If you want to save without needing to think about it, automation is key. Automate monthly or weekly transfers from checking to savings and set up automatic contributions into your workplace retirement account. Start with however much you can afford, even if it’s not a lot. Increase contributions as your paycheck and budget allow.
- Plan for large expenses. When you allow large expenses to sneak up on you, they can derail your budget, empty your savings or force you to take on high-interest debt. Instead, do a little planning for significant spending. List large and irregular expenses like car registration costs and vacations and break them down into monthly savings goals. Include these in your budget.
- Take advantage of high-yield savings accounts. When you’re working hard to save money, a competitive interest rate can accelerate the process. To get the most from your savings, put your cash in a high-yield savings account instead of a traditional savings account. High-yield savings account rates beat national averages and tend to offer more flexibility and tools.
Americans’ average savings account balances trended upward in 2021 and 2022, but the habit didn’t necessarily stick. Americans are saving less of their income overall, and many have little set aside for emergencies. But with interest rates hitting 15-year highs, consumers have more opportunity to save efficiently, and many have goals to increase savings and emergency funds.
That said, saving isn’t always easy. Your ability to save for unexpected expenses, retirement and other financial goals depends on your age, location, income and spending habits. But when you start early and use the tools at your disposal—like tax-advantaged accounts, high-yield savings accounts and automatic transfers—you’ll make significant progress toward your short- and long-term goals.