Author Topic: Article : How Much Households have In Their Savings Accounts  (Read 2373 times)

Reader

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Article : How Much Households have In Their Savings Accounts
« on: October 08, 2018, 02:14:32 PM »
The article gives an interesting view of what median and average savings are like for each income band across banking and retirement accounts.
The savings really rachet up for those in the top 1% and 10% income brackets.

In the book "The Millionaire next door", the expected networth of a person should be "Age x PreTax Annual Household Income / 10". so if a top 1% income earner has an annual pretax income of $300k, the expected networth at an median age of 42 (based on median age of a US working adult) should be $1.26M which is quite close to the $1.125M in the article.

https://www.cnbc.com/2018/10/08/how-much-the-top-1-percent-of-households-have-in-their-savings-accounts.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo

wageslave23

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #1 on: October 08, 2018, 02:35:37 PM »
When I read that article I thought the median savings seemed low, but reading your analysis I guess its about right (Is $300k the median 1% pretax income?).

Although that only holds true for the top 1%.  The top 10% are way behind the MND suggested savings amount. 
« Last Edit: October 08, 2018, 02:39:48 PM by wageslave23 »

SimpleCycle

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #2 on: October 08, 2018, 02:39:45 PM »
The cutoff for a top 1% income is about $420k, and the average 1% income is even higher.

I would expect even in the top 1%, there are many underaccumulators of wealth.

Slow2FIRE

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #3 on: October 08, 2018, 03:12:41 PM »
Wish that article had broken it up as:
Top 1%
Next 9% (not include the top 1% in this group)
Next 10% (they completely disregarded the 80% to 89.9% group)
The rest of the groupings are just fine.

I'd much rather compare myself to my own cohort without the distorting effects of including the top 1%.  (yeah, yeah, comparison is the thief of joy, but I still like to have something to measure against).

DreamFIRE

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #4 on: October 08, 2018, 05:06:30 PM »
I'll just compare my single person household to the top 1%, and I'm saving more than most at that level.

dude

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #5 on: October 09, 2018, 09:34:03 AM »
Happy to know we're far ahead of the average, and far, far ahead of the median.

nath

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #6 on: October 10, 2018, 05:02:21 AM »
Seems like really inaccurate data to me!
What sort of 1%er would be foolish enough to leave an average of $2.5m in a “SAVINGS” account??

Unless these figures refer to the ave/median household net worth then it seems about right.

And if your talking about billionaires they are more like the 0.001% of the population.
Your local family doctor is probably the best example of a 1%er and their net worth might just hit these levels.

And what about all the other articles that state 80% or Americans or whatever have less than $1000 in cash on hand for an emergency?


kingxiaodi

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #7 on: October 10, 2018, 07:39:01 AM »
Seems like really inaccurate data to me!
What sort of 1%er would be foolish enough to leave an average of $2.5m in a “SAVINGS” account??

Quote
The top 1 percent of earners have a median balance of $1.13 million across various types of banking and retirement savings accounts. When you look at the average account balance, that number is even higher: $2.5 million. 
(emphasis mine)

Glenstache

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #8 on: October 10, 2018, 07:42:38 PM »
Who cares what other people are doing? Do they have the same financial goals, or constraints? Does any of this affect your own FIRE plans?

I am far more worried about the impact of people who live paycheck to paycheck than the 300k/year crowd that is on-track for retirement. The bottom quartile effectively have zero savings. For sure some are just consumer suckas making bad choices, but a lot of the very bottom is due to low income.Those are the people of interest. The story in the high numbers is that we have wild income and asset inequality in this country and that the upper crust would have to be idiots not to have savings.

DreamFIRE

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #9 on: October 10, 2018, 08:40:17 PM »
the expected networth at an median age of 42 (based on median age of a US working adult) should be $1.26M which is quite close to the $1.125M in the article.

Unless these figures refer to the ave/median household net worth then it seems about right.

And if your talking about billionaires they are more like the 0.001% of the population.
Your local family doctor is probably the best example of a 1%er and their net worth might just hit these levels.

The article in OP refers to "savings", not "net worth".   Net worth includes your home equity, but that's not "savings" or "stash".

expatartist

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #10 on: October 10, 2018, 09:18:16 PM »
Always good to see where things stand. In a country with few safety nets, it's tough to see the savings gap that's inevitably part of the wealth gap.

Reader

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Re: Article : How Much Households have In Their Savings Accounts
« Reply #11 on: October 11, 2018, 08:00:18 AM »
Who cares what other people are doing? Do they have the same financial goals, or constraints? Does any of this affect your own FIRE plans?

I am far more worried about the impact of people who live paycheck to paycheck than the 300k/year crowd that is on-track for retirement. The bottom quartile effectively have zero savings. For sure some are just consumer suckas making bad choices, but a lot of the very bottom is due to low income.Those are the people of interest. The story in the high numbers is that we have wild income and asset inequality in this country and that the upper crust would have to be idiots not to have savings.
i'm with you. having more awareness based on facts is always good. the key takeaway i get from the figures is that the key to savings is to get people better paying jobs. you can see that median savings is no longer zero once income reaches 40th percentile which is ~$30,000 a year. so a person has to find a job that pays that or more in order to save consistently.

$30,000 a year translate to $14.5 an hour for an 8-hour day 260 days a year. http://www.soldering.biz/blog/jobs-that-pay-15-an-hour