Americans aren't saving nearly enough

Studies show that around 35 percent of Americans would run into financial trouble if they missed a single paycheck or were hit with an unexpected expense of $1,000. When it comes to saving up for the big things—like retirement—the data are far worse. A 2018 survey conducted by Northwestern Mutual, a financial services firm, found that one-third of Americans have less than $5,000 in private retirement savings, and the average amount tucked away is just $84,000, far less than the nearly $1 million the average retiree will need.

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All told, the American personal savings rate, a measurement of how much the average household saves after all taxes and spending, has been below 10 percent for nearly the entire 21st century (though it has rebounded from a low of 2.2 percent in July 2005 to a recent high of 7.7 percent in December 2018, according to data from the Federal Reserve).

“Most Americans really ought to be saving more,” economist Tyler Cowen wrote in January after a government shutdown exposed just how quickly some Americans can end up on the rocks. “It shouldn’t be controversial to point this out.”

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