Are You Saving Enough?

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Most individuals understand that in order to achieve significant financial goals, they must learn to make saving a significant part of their lives. As a nation, however, how successful are we at saving?

• According to the US Commerce Department's Bureau of Economic Analysis, the personal savings rate was 4.0% of disposable income in 1993, 5.3% in 1992 and 4.8% in 1991, a significant drop from over 9% in the late 70's . The Commerce Department expects the savings rate to range between 3.0% and 3.7% through 1998. (Source: Financial Planning, June 1993, p.25)
• Our personal savings rate is anemic compared to the savings rate in other countries. For example, the Japanese save 15% of their disposable income while the Germans save 12.6%. (Source: SmartMoney, October, 1993, p. 110)
• The National Center for Financial Education estimates that the average consumer wastes 30% of discretionary income. This is money which could otherwise be used for saving. (Source: Financial Planning, November 1993, p.36)
• A Federal Reserve Bank survey indicates that as many as 20 million households have no intention of saving at all. (Source: Fortune, November 15, 1993, p.102)
• Only 70% of those eligible to participate in 401(k) plans to do so. While the maximum amount that could be contributed to a 401(k) plan was $8,994 in 1993, the average amount contributed was $1,500. (Source: Fortune, November 15, 1993, p.108)
• A recent survey of retirees found that 25% of the respondents felt that before retirement, they should have saved more or should have obtained more investment or financial planning information. 34% of those respondents worked after retirement, with 59% of the group indicating that they worked because they needed the money. (Source: National Underwriter, September 27, 1993, p.17)

For more retirement planning and investment advice, e-mail a Provident Financial Consultant* or call (650) 508-7222 or (800) 656-4096. Provident offers a full range of Investment and Retirement Planning services.