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February 22, 2016 at 09:40 AM
As the 10th annual America Saves Week kicks off, research shows Americans are making at least modest progress on their savings goals. Although only 40% of consumers say their progress in meeting savings goals is good or excellent, 70% said they’ve made some progress. Two-thirds are saving a portion of their income, and 63% said they have enough emergency savings to cover unexpected expenses like car repair or a doctor’s visit.
The America Saves initiative was launched in 2007 as an “annual opportunity for individuals to assess their savings and for organizations to provide support, encouragement and opportunity for their constituents to save successfully,” said Jack Gillis, director of consumer affairs for the Consumer Federation of America, on a media teleconference.
Stephen Brobeck, executive director of the Consumer Federation, said more than 1,800 organizations participate in America Saves Week, including state and local governments, financial services providers, nonprofit groups and employers. The Department of Defense and the armed forces are especially active, backed by Military Saves Week, which is a concurrent initiative, he said.
CFA’s America Saves campaign and the American Savings Education Council, a program of the Employee Benefit Research Institute Education and Research Fund, surveyed more than 1,000 adults in January about their savings habits and announced the results today.
The theme for this year’s America Saves Week campaign is automated saving, and this year’s survey included a question about workplace savings plans for the first time. Most respondents (82%) said they would contribute more than 3% of their salary to a retirement savings plan with automatic escalation, and 40% said they would contribute 10% or more.
“This is a strong indication that employees may well be more open to higher-than-expected contribution default percentages, including auto-escalation, than many have generally believed,” Harry Conaway, chairman of ASEC and president and CEO of EBRI, said.
He said some employers may not offer automatic contributions because they’re afraid workers will resist them, but the more employees ask for those plan design features, the more comfortable sponsors will be with them.
Men tend to have more positive savings habits than women, the survey found. They were more likely to say they have made good or excellent progress in their savings goals, to know their net worth, to have no consumer debt or a plan to reduce it, and to have emergency savings.
Among pre-retirees who had a mortgage, 77% of men said they planned to pay it off before they retire, compared with 68% of women. Incomes frequently fall in retirement – not always, but usually – Brobeck said. “It’s very important to have paid off your mortgage by the time you retire because that greatly lowers your living expenses.”
