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 save based on their age.
Let’s do that.
Savings Based on Age
If you want to see how I generated this chart, please read on for methodology.
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 Do People Save By Age in America? 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):
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?