Average Savings Rate in the US: What the BLS Data Actually Shows

# Average Savings Rate in the US: What the BLS Data Actually Shows

The bottom income quintile in the US doesn't save — it dissaves. According to the BLS Consumer Expenditure Survey (CEX), households in the lowest 20% by income spend roughly 130–140% of their pre-tax income on average, drawing down savings or borrowing to cover the gap. That fact alone makes the headline "average savings rate" figure almost meaningless without context. Where you sit in the income distribution determines your savings rate far more than any habit or budgeting strategy.

## What the average savings rate in the US actually is

The personal savings rate published by the Bureau of Economic Analysis (BEA) fluctuates with economic conditions. It spiked above 30% during the pandemic stimulus period of 2020, collapsed to around 3–4% in 2022–2023 as inflation eroded purchasing power, and has since hovered in the 4–6% range for the broader population.

The BLS CEX data tells a more granular story. Broken down by income quintile, the picture is stark:

- **Lowest quintile**: Negative savings rate (dissaving of 30–40% of income is common)
- **Second quintile**: Near zero to slightly negative
- **Middle quintile**: Approximately 3–6%
- **Fourth quintile**: Approximately 8–12%
- **Highest quintile**: 20–30%+

The mean household savings rate across all quintiles lands somewhere in the 7–10% range, but this number is pulled heavily upward by high earners. The median experience — what a household in the middle of the distribution actually saves — is considerably lower, often 3–5%.

Aggregate numbers are also affected by what counts as "savings." The CEX captures expenditure; savings is calculated as income minus expenditures. It includes contributions to retirement accounts (401(k), IRA), but the distribution of those contributions is extremely skewed. The top quintile accounts for a disproportionate share of all retirement account contributions in the US.

## How savings rates vary by income, city, and household type

Income is the dominant variable, but geography and household composition introduce meaningful variation on top of it.

**City-level differences** are significant. A household earning $90,000 in a low-cost Midwestern city faces a very different cost structure than the same household in San Francisco or New York. Housing costs are the primary driver of this gap. Median rent in New York City for a one-bedroom exceeds $3,000/month in many neighborhoods, while comparable space in cities like Columbus, Ohio or Memphis, Tennessee runs $1,000–$1,400/month. That $1,600–$2,000/month difference in housing alone translates to roughly 20–25 percentage points of savings rate for a household earning $90,000 gross.

If you're based in New York, the [savings rate in New York](https://pathverdict.com/financial-position/new-york) breakdown gives city-specific benchmark data rather than national averages.

**Household composition** also matters. The CEX consistently shows that single-person households have lower savings rates than dual-income households at the same per-capita income level, due to the lack of shared fixed cost. A two-income household with $150,000 combined income pays one rent, one set of utility bills, and splits many discretionary costs — producing a higher savings rate than two individuals each earning $75,000 and living separately.

**Age cohorts** show a predictable pattern: savings rates tend to rise through the 30s and 40s as income peaks and fixed obligations like childcare or mortgage debt begin to reduce, then decline again in retirement as households draw down accumulated assets.

## The gap between what Americans save and what they need to save

Standard financial planning targets — 15% of gross income toward retirement, often cited by Fidelity and Vanguard — sit well above what most US households actually save. At a 4–6% median savings rate, the typical American household is saving less than a third of what conventional retirement guidance recommends.

The consequences aren't hypothetical. The Federal Reserve's Survey of Consumer Finances shows that median retirement savings for households aged 55–64 — the decade before typical retirement — is around $185,000–$200,000. At a 4% withdrawal rate, that generates roughly $7,400–$8,000 per year in retirement income. Social Security supplements this significantly, but median Social Security benefits for retired workers run approximately $1,700–$1,900/month ($20,400–$22,800/year), meaning most households are relying on Social Security for the substantial majority of their retirement income.

Whether that's adequate depends on pre-retirement spending, health costs, and household structure. But the data makes clear that Social Security isn't functioning as a supplement for most retirees — it's functioning as the primary income source.

For a fuller discussion of what savings rate thresholds mean at different life stages, see [what's a good savings rate?](https://pathverdict.com/blog/what-is-a-good-savings-rate)

## What drives the average savings rate up or down

Several factors consistently appear in CEX data as predictors of savings behavior:

**Housing cost as a share of income** is the most powerful lever. Households spending more than 35% of gross income on housing rarely achieve savings rates above 5%, regardless of income level. The rent-to-income ratio constrains savings capacity mechanically — it's arithmetic, not behavior.

**Employer retirement contributions** matter more than most people account for. A 401(k) match of 4% effectively raises the savings rate by 4 percentage points without any behavioral change. Households with access to employer matching and who use it fully show materially higher effective savings rates than those without.

**Income volatility** depresses savings rates. Self-employed workers, gig economy participants, and hourly workers with variable hours tend to show lower savings rates in CEX data, partly because precautionary spending rises with income uncertainty and partly because irregular income makes systematic saving harder to automate.

**Debt servicing costs** function similarly to housing. Households with high student loan payments, car loans, or credit card balances redirect income that might otherwise be saved toward debt service. CEX data doesn't fully separate debt repayment (which builds net worth) from consumption spending, which means some households appear to save less than they are actually improving their financial position.

If you're trying to understand whether your own savings rate reflects genuine financial progress or is being masked by these factors, [Am I saving enough?](https://pathverdict.com/blog/am-i-saving-enough) walks through the relevant thresholds.

## How PathVerdict benchmarks your savings rate against US data

PathVerdict uses BLS CEX microdata to build income-specific benchmarks rather than comparing your savings rate against a single national average. The tool accounts for the fact that a 10% savings rate means something very different at $45,000/year versus $150,000/year.

When you enter your income, rent, and monthly expenses, [PathVerdict](https://pathverdict.com/) places your savings rate within the distribution for your income quintile and assigns one of five verdicts:

- **Critical**: Dissaving or savings rate below 2%
- **Falling Behind**: 2–5%, below the median for your income level
- **Under-Saving**: 5–10%, below recommended targets
- **On Track**: 10–15%, consistent with conventional retirement guidance at your income
- **Ahead**: 15%+, above median for your income quintile

The benchmarks are drawn from the same CEX data that underlies this article, applied at the city level where sample sizes permit. For methodology details, see [how we calculate savings benchmarks](https://pathverdict.com/methodology).

No signup is required, and the calculation takes under 30 seconds.

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## Frequently asked questions

### What is the average savings rate in the US right now?

The BEA personal savings rate has been in the 4–6% range since 2023. BLS CEX data shows the median household savings rate is similarly low — approximately 3–5% for middle-quintile households. High-income households save at much higher rates, which pulls the mean figure upward to 7–10%, but this doesn't reflect the typical American household's experience.

### How does the US savings rate compare to other countries?

The US savings rate sits near the lower end among developed economies. Germany's Destatis EVS data shows household savings rates in the 10–13% range. The UK's ONS Living Costs and Food Survey puts the UK below Germany but generally above the US. France and the Netherlands also tend to show higher household savings rates than the US, partly driven by lower out-of-pocket healthcare costs and different pension structures.

### Does a 401(k) contribution count toward my savings rate?

Yes. Pre-tax 401(k) contributions reduce taxable income and represent deferred compensation being saved for the future. For the purpose of calculating savings rate, they should be included. The practical implication is that many people underestimate their savings rate by focusing only on money deposited to savings accounts and ignoring retirement account contributions.

### What savings rate should I be targeting?

A commonly cited target is 15% of gross income toward retirement, which assumes a roughly 35-year working period and a 4% withdrawal rate in retirement. Lower savings rates can still be adequate if you start early, have significant employer matching, or plan to work longer. Higher rates are needed if you're starting later or targeting early retirement. The right number depends on your specific timeline and spending level in retirement.

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To see how your savings rate compares against US households at your income level — not just a national average that may not apply to you — check your financial position at [PathVerdict](https://pathverdict.com/). Enter your income, rent, and monthly expenses and get a benchmark-based verdict in under 30 seconds.