Does America have a personal savings problem heading into what some financial experts call a turbulent 2016 economy?
It sure looks that way, based on the latest survey from Washington, D.C.-based America Saves that covers Americans' savings practices across a wide variety of personal financial platforms.
According to America Saves, only two-fifths (40%) of U.S. households report good or excellent progress in "meeting their savings needs." Furthermore, only 49% of U.S. adults are saving at least 5% of their income, and only 52% say they are "saving enough for retirement" with a "desirable standard of living."
There is some good news, at least on modest terms. 70% of respondents "reported at least some progress in meeting savings needs," states America Saves. Additionally, 66% say they're "saving at least some of their income."
Gender issues come into play on the savings front, as well. "74% of men, but only 67% of women, reported that they were making saving progress, and 44% of men, but only 36% of women, reported good or excellent saving progress," American Saves states.
But there is a reasonable and historic rationally for the gender savings disparity, the organization reports. "The most important reason for the gender gap in savings is differences in income and wealth," noted Stephen Brobeck, executive director of CFA and a founder of America Saves. "The fact that men have larger incomes and financial assets than women makes it easier for them to save."
Banks and other financial institutions aren't helping much, either.
"One of the indirect byproducts of the recession stimuli is rock-bottom interest rates, which incentivizes the consumer to spend and not save," says Michael Catania, a consumer savings expert and the co-founder of the PromotionCode.org. "Consequently, with the potential of a second downturn looming, consumers are even less-prepared now than in 2007 since the relief period was only eighteen months. That's not long enough to regrow the savings lost in the previous recession, which lasted almost twice that long."
But the economy is hanging in there, for now, other experts point out. Josh Nelson, founder of Keystone Financial Services in Loveland, Colo., says weaker savings levels are actually a result of a stronger U.S. economy. "What I see happening is an improving economy, lower unemployment rates, and consumers starting to spend more," Nelson says. "Low oil and gas prices, coupled with healthy wage increases this past year, have put more money in the average consumer's pocket."
"Consequently, investors are nervous with all of the market volatility," he adds. "But I'm not seeing any big changes in savings and spending habits yet."
No matter what the economy is doing, the path to clarity and more personal savings cash starts with a good blueprint, experts say.
"One of the key takeaways of the recent Consumer Federation of America survey is its conclusion that those people with a plan save more successfully," says Kevin Smith, executive vice president and founding partner of Smith, Mayer & Liddle a wealth advisory group of Janney Montgomery Scott in York, Pa. "Those with a plan have significantly better savings habits than those without a plan across multiple categories."
With potentially stiffer economic headwinds on the horizon, Americans better get that savings plan up and running fast -- before time runs out.