Bank Savings Low, Americans Dip Into Retirement Savings
NEW YORK (TheStreet) -- Average bank savings accounts are up since the Great Recession, but not enough to keep Americans from struggling to make ends meet.
"Consumers are currently saving about 4.5% of their after-tax incomes, in line with the average of the past decade," says Michael Gregory, director of U.S. economics at BMO Capital Markets. "While this is below the more than 6% savings rate in the wake of the recession -- as households worked hard to repair their balance sheets -- it remains well above the lows of around 2.5% that we experienced during the housing bubble period."
While Americans struggle to creep back up to that pre-recession 6% savings level, the job will be that much more difficult if consumers continue to tap into a bad financial habit: dipping into retirement savings for everyday needs.
TIAA-CREF says that 29% of Americans have taken out a loan from their retirement plans, and 44% of that figure say they regret it. Women are more likely than men to take from their retirement savings, by a measure of 52% to 41%.Also see: How to Keep Inflation From Killing Your Retirement says Teresa Hassara, executive vice president of TIAA-CREF's Institutional Business. "Individuals should weigh all of their options carefully before borrowing from their plan savings or reducing their contributions." Also see: Nearly 75% of Our Middle-Aged Have No Plans to Retire
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV