Zielonka Financial Services LLC

(888) 967-1040

Money Read Time: 2 min

U.S. Personal Savings Rate

The U.S. personal saving rate stood at 3.4 percent at the end of 2022, down from the 7.5 rate at the end of 2021.The personal saving rate is the federal government's estimate of what percent of their incomes U.S. households are saving. But market watchers and economists are mixed on what can be learned from swings in the saving rate.1

Why Economists Struggle

They struggle with the personal saving rate because it's a derivative number – that is, it's not measured directly. Instead, the Bureau of Economic Analysis derives the saving rate from other estimates. Here's how it's calculated:2

  1. The Bureau of Economic Analysis subtracts payroll and income taxes from personal income to get disposable personal income.
  2. The Bureau then subtracts its estimate of personal outlays, which include expenditures, interest payments, and payments, from disposable personal income to get an estimate of personal savings.
  3. The personal saving rate is calculated by dividing personal income by personal savings.

As currently structured, the U.S. Personal Saving Rate does not include capital gains from the sale of land or financial assets in its estimate of personal income. This effectively excludes capital gains – an important source of income for some.

Gaining Insight

Gaining a bit of insight into a popular economic indicator can help you better understand trends as they are discussed in newspapers and websites. However, don't let your long-term savings program be influenced by a national number.

1. StLouisFed.org, 2023
2. BEA.gov, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

What is the Value of Your Business?

What is the Value of Your Business?

Ascertaining the value of your business is important for a variety of reasons.

All Muni Bonds Are Not Created Equal

All Muni Bonds Are Not Created Equal

Gaining a better understanding of municipal bonds makes more sense than ever.

Saving for College

Saving for College

This calculator can help you estimate how much you should be saving for college.

 

Have A Question About This Topic?







Thank you! Oops!

Rebalancing Your Portfolio

Over time, different investments' performances can shift a portfolio’s intent and risk profile. Rebalancing may be critical.

Making a Charitable Contribution

There are benefits and limitations when you decide to donate stock.

Protecting Your Business from the Loss of a Key Person

Business owners may be able to protect themselves from the financial consequences of losing a key employee.

View all articles

Comparing Investments

This calculator compares the net gain of a taxable investment versus a tax-favored one.

Estimate Your RMD

Help determine the required minimum distribution from an IRA or other qualified retirement plan.

What Is My Current Net Worth?

Use this calculator to estimate your net worth by adding up your assets and subtracting your liabilities.

View all calculators

5 Smart Investing Principles

Principles that can help create a portfolio designed to pursue investment goals.

Long-Term-Care Protection Strategies

The chances of needing long-term care, its cost, and strategies for covering that cost.

Protecting Those Who Matter Most

The importance of life insurance, how it works, and how much coverage you need.

View all presentations

Suddenly Single: 3 Steps to Take Now

Have you found yourself suddenly single? Here are 3 steps to take right now.

Questions to Consider When Buying a Vacation Home

Doing your research is key before buying a vacation home.

Exit Strategies of the Rich and Famous

Estate conservation is too important to put off. Do you have a smart exit strategy?

View all videos