Why do they say Americans have a negative savings rate when...?

Question

...15% of nearly everyone's earned income is saved straight into Social Security, whether they like it or not?

P.S. I'm guessing there is a technically correct answer to the question, anyone else want to take a stab at it?

Answer 1

Because if you can't scare people into thinking something is wrong; no one will buy your newspaper or vote for you.

It's the same reason people often talk about the US's debt instead of a debt/income ratio or even as net assets.

Answer 2

I think it is because of expensive health care costs, expensive college education and the fact that wages are not keeping up with the high cost of inflation. I mean have you gone to the grocery store lately and seen the price of food these days? I mean the freakin bread is $2.50 just at Wal Mart alone! That adds up--right along with other grocery items- at the cash register. Yep...things are quite expensive these days. I think this is the reason why Americans have a negative savings rate. Also, the U.S. government is currently in the red. We also don't know if SS will be here when the generation x becomes 65.

Answer 3

When the government calculates saving rate, SS is considered a tax and not a savings. Well thought out misleading scheme, isn't it?

401k's are not counted as savings either, which greatly distorts the real saving rate.

And you didn't ask, but in case you don't know - retirees add to the negative savings rate. If a millionaire is retired with no income and spends $50,000 a year, then he has a huge negative savings rate because of all the spending. Sweet.
.

Answer 4

First, social security sounds like it is more a tax than savings.

Second, buy a house and it could be 5,000% negative savings.

Buy a car - 50% negative savings. It cancels out your 15% pretty quick.

Answer 5

Social security is not savings. Most people only contribute about about a third or less of what they receive in pay outs after they are eligible to begin receiving pay outs at age 62 or later.

Answer 6

Social Security is not a savings account, it's a tax. Americans have negative savings because they are up to their eyeballs in credit card debt.

Answer 7

Well considering most people will never see it. Or the fact that when your old enough it's not enough to live on. It takes more then just SS to live off of when you retire. My husband and I put an additional 10% into a TSP account and we still now that this is not enough. When we can we will put more away.

Answer 8

rate reductions does not count style investments as rate reductions. Your 401K plan does not count style nor does your 2d domicile, however the money on your rate reductions account does. You get a damaging rate reductions fee which comprise your revolving debt (short term loans which comprise mastercard money) exceeds what you have under your matress and on your rate reductions account. The final time the U.S. had a damaging rate reductions fee replaced into for the period of the great melancholy.

Answer 9

Because that 15% goes to companies like Halliburton for its no bid Government contracts so it can then go overseas and set itself up tax free..

Answer 10

Perhaps because there is no guarantee that we will ever get the SS benefits.