Savings Rate

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. National Savings Rate

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

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

    A plan that individuals may establish to arrange and plan for ...
  4. Personal Finance

    All financial decisions and activities of an individual, this ...
  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 ...
Related Articles
  1. Borrowing From Your Retirement Plan
    Retirement

    Borrowing From Your Retirement Plan

  2. Don't Forget The Kids: Save For Their ...
    Savings

    Don't Forget The Kids: Save For Their ...

  3. Investing In Your Child's Education
    Insurance

    Investing In Your Child's Education

  4. A Look At National Debt And Government ...
    Bonds & Fixed Income

    A Look At National Debt And Government ...

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center