Savings Rate


DEFINITION of 'Savings Rate'

The amount of money, expressed as a percentage or ratio, that one deducts from his/her disposable personal income to set aside as a nest egg or for retirement. The cash accumulated is typically put into very low-risk investments (depending on various factors such as expected time until retirement), like a money market fund or a personal IRA comprised of non-aggressive mutual funds, stocks and bonds.

BREAKING DOWN 'Savings Rate'

For years, the savings rate in the United States has declined. In the 1970s and 1980s, personal savings rates were in the 5% to 7% range but then decreased to 1% to 3% range in the 21st Century. These averages figure tend to fall even lower as the American population, as a whole, continues to age. The national average savings rate is often determined by how a particular culture views debt and values possessions.

  1. Personal Finance

    All financial decisions and activities of an individual or household, ...
  2. National Savings Rate

    An estimate from the U.S. Commerce Department's Bureau of Economic ...
  3. Department of Commerce

    The cabinet department in the U.S. Government that deals with ...
  4. IRA Plan

    A plan that individuals may establish to arrange and plan for ...
  5. Disposable Income

    The amount of money that households have available for spending ...
  6. Savings

    According to Keynesian economics, the amount left over when the ...
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