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Schmidt Wrote: Chet -- I don't understand what point you are making when you talk about "hoarding". Personal Savings is running at about 5.2 percent, somewhat lower than the historical average.
My head feels like it's going to pop. Since about 90% of the income has gone to the 1%.
Don't you think it'd be more realistic to look at the "personal savings" of the bottom 90%.
If I have a dollar in savings and you have a Billion in savings, it is true, we average $500M a piece. But what does that prove? Most of us understand simple math, but our understanding of math is far different that yours I'm guessing.
PS: I'm happy your savings is going up, really.
Gimpy -- I don't understand what point you are making. The Personal Savings, along with Personal Disposable Income and Personal Consumption are monthly figures put out by the Bureau of Economic Statistics to help economists gauge how healthy the economy is. I don't try to read much into the figures because I am not an economist, although I like to browse trends and read what they have to say about it. The only point I was making is that the number is somewhat low by historical standards, although it has been much lower at times. That could be due to many factors, but what it does suggest to me is that the economy is not in the tank as many politicians seem to want you to believe; however, there could be problems in the future as people want to retire without adequate savings. Some will elect to retire at age 70 or later instead of 66, assuming they are still healthy and their employer allows them to keep working at that age.
To my knowledge, the Bureau doesn't break out the number according to income percentage. I'm not sure they even gather the data to make a correlation of the brackets of incomes of specific individuals with their specific savings rate. In any case, it is intuitive that once you reach a certain threshold of income, the more money you make, the more you save. The poorest people do not save because they don't have the money to save.
On the other hand, I know many middle income people that have not saved much, mainly because they live for the present and don't plan for the future. It does require self discipline.
The alternative is to increase Social Security benefits to retirees across the board and then apply tax penalties to the higher income people. Oh but they do that already for people with high adjusted incomes. The more you make, the more you give back as a percentage of your total income.
For your information, I am retired and my individual savings rate as measured by the BES is essentially near zero, as I only draw income that I need for my life style.