Document Type

Article

Publication Date

4-1-2018

Abstract

The personal savings rate is identified as an average savings rate for the individual American. The current rate is 5.7%, and that means for every $100 of after tax income an American brings in, he or she saves 5.7% of it. Since the 1980’s Americans have been saving less and less possibly because there more comfortable with their wealth. Looking forward though we try to identify in an environment where the cost of living will be rising, and the interest rates will be rising, will Americans face fiscal troubles if they don’t start saving more now? One thing we can understand is that you can’t necessarily predict the personal savings rate because you don’t know how much one factor will influence another. With increased real wages, increased interest rates, and inflation that has been fairly steady but increasing, it’s really a matter of how much one factor offsets the other.

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