Ask Bud - What's Included in the National Savings Rate?

  • Question
  • What's Included in the National Savings Rate?


Answer from Bud

  • Have questions for an expert?

    Over the years, financial sales firms have tried to find reasons to ignore the lack of savings as depicted in the charts on national savings rates from the Bureau of Economic Analysis, BEA. Remember when they said that the returns were so high that people no longer had to put in additional money into retirement plans? Then there was the time when we were all going to inherit fortunes (presumably from Bill Gates, Warren Buffet and George Soros). In more recent times it was no longer necessary to put money into savings because housing prices were rising so fast. There have also been charges that the national savings rate doesn't include a lot of savings. So I asked the BEA if the national savings rates included all of the following, some of which writers have said are excluded from the national savings rate computations:

    1. Employee contributions to 401(k), 403(b), etc.?
    2. Employer matching funds to the above?
    3. Contributions to IRAs?
    4. Employer contributions to defined benefit plans, i.e., pensions?
    5. The net of people's deposits less withdrawals to mutual funds not in empoyer savings plans or IRAs?

    The answer given below in more detail by the Bureau of Economic Analysis, is, in brief, "Yes, the savings national savings rate includes these things."

    There's not much wiggle room now. People flat out haven't saved enough for retirement -- and when they wake up consumerism is going to take one heck of a big hit!


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H. K. Bud Hebeler is author of J.K. Lasser's Your Winning Retirement Plan, Getting Started in a Financially Secure Retirement, and retirement articles on He is often quoted in The Wall Street Journal and other financial publications.

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