Americans still struggling to amass savings
A growing percentage actually have nothing set aside.
Selecting the right savings account will ensure you’re receiving the highest returns possible. However, if you haven’t saved any cash to contribute, you’ll be hard-pressed to earn a dime.
The latest GOBankingRates survey asked more than 8,000 Americans, “How much money do you have saved in your savings account?” While the results varied, 57% of respondents said they have less than $1,000 saved.
Although this is a substantial proportion, it’s a significant improvement on last year’s figures (69%).
This means two-fifths (43%) of Americans have $1,000 or more in savings, compared with just 31% in 2016.
One quarter (25%) of respondents claim they have $10,000 or more in savings, up 10% on last year’s results.
However, a growing proportion (39%) of Americans have zero savings set aside, more than in 2016 (34%).
This lack of provisions may lead to financial strains if an unpredictable event or emergency where to occur, not dissimilar to recent disaster crisis’ still playing out in parts of Texas, the Caribbean and south Florida.
The survey delivered mixed results about millennials’ savings habits. A higher proportion of millennials (13%) now have $10,000 or more in savings compared to last year, and fewer (21%) have less than $1,000 in savings.
However, like the average American, a growing number of millennials have nothing saved. The percentage of young adults with zero dollars in a savings account rose substantially in 2017, up 15% year-on-year to 46%.
The report suggests young adults tend to have lower salaries and hefty student debt, making it difficult to generate savings. GOBankingRates’ 2016 Debt survey found around two fifths of millennials have student loans.
Whitehouse Wealth Management president and chief executive Alex Whitehouse said that while savings are important, many Americans live “paycheck to paycheck”, struggling to pay student loans and credit card debt.
“For those saddled with an enormous amount of debt, building savings can feel like climbing Everest,” he said.
Obviously, savings account balances generally increase with age. Therefore, it’s no surprise seniors are the group with the highest percentage of respondents (39%) holding $10,000 or more in a savings account.
Earlier this year, the US government introduced new regulations aimed at helping seniors manage their retirement savings more effectively, ensuring they receive sound investment advice and greater protection.
Just like any other source of income, interest you earn from a savings account is subject to tax. Find out how.