Best Savers in the US? Millennials

The United States is not a nation of savers on the same scale as countries like Japan where the personal savings rate is around 24%. But if the millennial generation (18 to 34 year-olds) keeps up its savings ways, the gap may close.

According to a recent survey by Bankrate, 62% of millennials are saving more than 5% of their income and 29% are saving more than 10%. By contrast, only 50% of older adults are saving more than 5% of their income.

In a study we noted last October, the bad news is that 21% of working Americans have no savings at all.

Though savings rise with incomes, 27% of Americans earning between $30,000 and $50,000 annually are saving more than 10% of their incomes, a larger share than the 24% earning between $50,000 and $75,000.
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Bankrate’s chief financial analyst, Greg McBride, said:

Millennials have a greater inclination toward saving, for both emergencies and retirement, than we’ve seen from previous generations. Much of this is attributable to the financial crisis and Great Recession coming during the financially formative years for many millennials.

Some 54% of millennials doubt their ability to repay their student loans and nearly half don’t think they could raise $2,000 to meet an emergency.

We noted on Sunday a report from the Federal Reserve Bank of New York on how debt balances are rising among baby boomers and not among younger Americans. Even though about 40% of millennials didn’t have any savings at the time of our October story, nearly 20% had saved more than $10,000 at that time. That’s more than half the total of Gen X savers, but still well below nearly 47% baby boomers who have been at for a lot longer.

Methodology: Bankrate’s Financial Security Index is based on a national telephone survey taken in English and Spanish by Princeton Survey Research Associates International. The survey was conducted March 3 to 6, 2016, with 1,000 adults living in the continental United States. The survey has a margin of error of plus or minus 3.7 percentage points.