Skepticism About Low Savings

We have new research suggesting that most Americans are saving enough.  In my speeches I have emphasized a bogusosity in the official savings definitions.  The savings rate may be as much as ten percentage points higher than official statistics show, because those statistics ignore half of retirement plan income and all realized capital gains.  Yet they count spending that is funded from these income sources.

Now we have new research from a different angle suggesting that 80 percent of Americans are, indeed, saving enough, and that most of the remainder are not too far off target.  The paper is plenty technical, but you can read it here. (Hat tip to Tyler Cowen at Marginal Revolution.)

Caution: these are aggregate figures.  You may have a personal savings crisis even if the nation as a whole does not, so don’t come crying to me if you’re eating dog food 20 years from now.

Business Strategy Implications:  Don’t give up on the consumer.  There is not going to be some time of awakening when families suddenly adopt depression-era attitudes toward spending.