January 21, 2016

SOLID BEATS LIQUID:

Why Don't Americans Save More Money? (DWYER GUNN, 1/21/16, Pacific Standard)

[O]nly 41 percent of households in the survey had $2,000 of liquid savings on hand (the cost of the median household's priciest financial shock).

"More than half of households (54 percent) could not replace one month's income using their liquid savings," concludes the second Pew brief. "Over a quarter of households do not have enough liquid savings to replace even one week of income."

When it comes to retirement savings, people choose the default option, or the "path of least resistance."

While low-income families are, unsurprisingly, generally worse off, even high-income families lack sufficient emergency savings. The Pew Center's research indicates that 25 percent of high-income households have "less than 13 days' worth of income in liquid savings." Meanwhile, 25 percent of households making less than $25,000 a year have no liquid savings at all, and the typical household in this income bracket has only six days' worth of income in liquid savings.

Why would you keep that much money in an account making 0% interest?

Posted by at January 21, 2016 4:05 PM

  

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