How much money does the average person save up in a year?

Question

Dont say it depends but im curious to know

Answer 1

You are asking about the "personal savings rate".

To answer your question directly, the personal savings rate for the average American was -1 percent in 2006. (people are spending more money than they earn)

But it is interesting to know two things: how is the personal saving rate calculated, and how usage of the "personal savings rate" might be misleading.

How is the personal savings rate calculated? The Commerce Department calculates the personal savings rate by subtracting spending from after-tax income. When spending exceeds income, the difference comes from borrowing or dipping into savings. [ex. gross monthly income is $3000, less taxes of $1000 = $2000 net monthly income. $2000 net monthly income, less monthly expenses and personal spending of $2000 = personal savings of $0.]

How might the personal savings rate be misleading? It does not consider pre-tax savings -- such as 401(k) accounts. [ex. monthly income is $3000, less 401(k) contribution of $100 = $2900 gross monthly income. $2900 gross monthly income, less taxes of $950 = net monthly income $1950. $1950 net monthly, less monthly expenses and personal spending of $1950 = personal savings of $0.]

Here is my point. In my mind, the $100 I put in my 401(k) account as "savings" for my retirement are savings. But it is not considered as "savings" in the context of the personal savings rate.

As you see from some of the other contributors, they are saving. But you were asking about the "average".

Answer 2

Most are not saving. What they should be doing is saving at least 10%. This is not as hard as it seems.

Employers generally give cost of living increases or the position may have "steps" based on longevity. If a person looks at the net increase in pay each time and puts aside half of it, they can see a dramatic increase in savings in just a few years.

The longer you wait to start saving, the higher rate you need to contribute later on.

Watch where you save. Don't settle for a regular savings account. Many pay .25% interest. Put it into CDs or money market funds or mutual funds to get a better rate of return. The "rule of 72" is divide 72 by the interest rate and that's how long it take to double the money. At 1% - 72 years; at 6% - 12 years. Quite a difference.

Answer 3

Americans are notorious for NOT saving, there's actually a negative savings rate, which means they're spending more than they are saving. Generally, after you pay off your debts and bills and still have about 25-30% of your money, you're in good shape.

Answer 4

Hopefully about 10% in retirement accounts.

I save about 12% in my 401(k), another 2 or 3 in a ROTH, and about 5 in my son's 529 plan. We also save about 3% in our emergency fund.

So we save a little over 20%.

Answer 5

Any where from $1,200,to $2,000.would be my guess in the total year savings unless they dont have any bills to pay and they just save all there money then I would say ball park figure would be $12,000 to $23,000.Me on the other hand I make good money but I blow it faster than I make it ,So me saving in a year would most likely would be $500.00 If that.(LOL)

Answer 6

There is a negative savings rate in the USA now. This means that most people spend more money than they earn. They are deeper in debt every year at this rate.

Answer 7

Your question would not make experience. i'd desire to declare you ought to objective to maintain $ten thousand a year. in case you earn $5000 a year, than that may no longer precisely powerful, is it? right here is an extremely commonplace rule: you ought to objective to have fee low value rates sufficient to disguise your residing expenses for 6 months. So in case you presently spend $3000 a month, you ought to have fee low value rates of roughly $18000.

Answer 8

10% for retirement, 10% for long term goal and 10% for short term goals. If they didn't save for retirement before 30 they may need to save 15-40% for retirement when they are older.

Answer 9

depends on what u are being paid