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December 04, 2008

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By now, even the guy living under the rock knows that we're going through tough economic times. And this is bad enough that it is forcing many who normally don't save to actually save.

So, to me, this figure isn't entirely surprising. Well, mildly surprising.

But what I REALLY want to know is, once the economy recovers, will many of these people continue to save? Or will they go back to their old consumer ways?

The numbers are pretty shocking (given the average savings rate of just under 1 percent in the US), check the data!

Vince Scordo

I don't believe those numbers at all.

I think they only surveyed their clients and if you are a Principal Financial Client, you are already working on saving, so you would be ahead of the rest of citizenry.

If they ask Joe Public, the results might be different.

I know we have a 6 month emergency fund (which may be used soon due to an impending layoff), but whenever I mention it to people, they look at me like I'm crazy and they say, "how can you afford to have savings?" WHAT? How can you afford NOT to have savings?! Especially now.

I don't mean to be the living under the rock guy, but I'm not going through tough economic times at all, at least insofar as the "economy" is concerned.
In fact, as far as I'm concerned, times are pretty good - inflation is low, interest rates are low, oil is low and dropping, etc.

My only complaint at the moment (and the only hardship I'm enduring) is with regard to the insane amount in taxes I'm paying, particularly property taxes (approaching $11,000 per year with the new assessment).

Which leads me to a point. I believe that many of the hardships Americans are facing are caused by spendthrift governments, from the federal level on down, depriving them of large amounts of their money. I know that I could live much more comfortably and save much more if I could cut my taxes in half.

Now, as to the specific point of this post, I'm wondering about the claim that 69 percent of retirees have an emergency fund. If you're retired, aren't your savings/investments perforce an emergency fund? Also, if you are not retired and have a substantial amount of your financial assets in cash, doesn't that count as an emergency fund? Or do you need a bank account labeled "emergency fund" to qualify?

I agree, the survey is skewed, especially when the survey says they can't determine a sampling error. over 90% of the respondents have 401k's. what is shocking is that only 56% of those who save in a 401k have an emergency fund. you would think that people who are investing and saving in retirement accts would be more knowledgeable and more financially astute, but just over half have an e-fund. that is the shocker.

By those numbers, almost 20% of Americans would have six-month-plus emergency funds. I'm not buying it. I bet the actual number is more like 5%. Heck, six months is more than many people would even recommend. (At a certain point, you do lose out by having your money sitting in a safe, low-return vehicle.)

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