The Savings Rate

[Max Sawicky]

>I think we need to look at why the savings rate is "so low"
>before we can draw any conclusions about what it means for the future.  I
believe that "saving for a rainy day" has been
>replaced in the minds of many people with "fund your retirement vehicle of
choice" -- with many people now tapped out on their contributions to 401k,
etc., they *feel* like they are saving.>>

The data include these as additions to savings.
They do not include capital gains, so on this
account, as I take you to imply, the rate is
understated (e.g., fixed amount missing from
numerator and denominator).

This is consistent with your remark about
behavior.  On the other hand, a lot of this
extra income is being spent, rather than
saved, which goes the other way.


> .  .  .
>It would be interesting to see some kind of research into the savings rate
of those who don't have access to a defined
>contribution plan (last I checked, it was less than half of
>the full-time workforce)

Very low, is my understanding.

MBS