How Much Do Americans Save, by Age?

September 22nd, 2013 by 

It wasn't too long ago when we posted our epic article (and corresponding calculator) on the ideal savings rate.  Since the Bureau of Labor Statistics recently released their 2012 statistical tables from the Consumer Expenditure Survey, I figured it might be interesting to look at how much American savings by age.

Let's do that.

Savings By Age in America

If you want to see how I generated this chart, please read on for methodology.

Savings by Age in America, 2012 CEX Data

Calculated Based on Expenses and Increase in Assets

You will, of course, immediately notice there are two savings rates calculated.  The Consumer Expenditures offers two ways to calculate savings rates, both of them pretty inaccurate: you can use Income After Taxes and subtract Expenses (CEX data is self-reported), or you can use Increase in Assets.  Since both are pretty bad, I just reported both of them.  Actual savings rates are, of course, lower than what either measure implies (because self-reported taxes are too low in the CEX) - but remember these are ostensibly net - after tax - savings rates.

What are American Savings by Age? a Dynamic Calculator

Another limitation?  This data is based on only 9 data points.

I apologize; I didn't want to mess with the microdata - and let's be honest: if your target is higher than what it should be, aren't you better off?  With that disclaimer in mind, here is a calculator for you to figure out exactly what your peers in America are saving (I start it at 15 years old and end it at 120):

So, of interest to most of the readers on this site (and according to our admittedly weak data!), a 30 year old saves roughly 15% of his or her income after taxes.  This is household data; please see the source material to see the household size by age.

Want to run the numbers on your own savings?

How Has Your Savings Rate Changed?

Sure, the data is weak, and it implies higher savings rates than the official reported savings rate.  Of interest, perhaps we're in the ballpark on this one - so use this calculator as a jumping off point (and, of course, note that you probably want to beat the results it gives you).  If you want to see some other work we've done on the CEX in the past, see our sin tax calculator and our American food spending calculator.

With all that in mind, how do the numbers look?  How did your savings rate (after tax, or net savings rate) change based on your age?  Did you save more as you got older?  Thoughts on American savings by age?



PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK lives in New Hampshire with his wife, kids, and dog.

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