Average and Median Savings Account Balances Differ Greatly
An often cited statistic suggests that the majority of Americans would be unable to come up with a few hundred dollars in the event of an emergency. While that may be true, there are of course those who maintain fairly healthy savings accounts. In fact a recent study by Magnify Money found that the average American household held $16,420 in their savings account. However a look at the median savings balance shows quite a disparity.
First, Magnify Money also looked at other average balances among other types of account. For example the average household checking account balance was found to be $9,750, just ahead of the $9,370 in money market accounts. Additionally the average household was found to have $144,560 across one or more retirement accounts. These figures also climbed higher when those without accounts were excluded from the averages.
So, if average savings balances appear to be so high, why all of the warnings that so few Americans have money on hand? Well, looking at the median balances from the same study tells a bit of a different story. When looking at the median savings account balance, the number plummets to just $4,830. This would suggest that a large number of those surveyed have balances well below the mean. Similar results were also found when it came to retirement accounts as the household median came in at $72,840, and among checking accounts with a median of $2,330. Conversely the median balance for money markets exceeded the average, sitting at $12,600.
There is some good news in than households whose savings exceeded the national average weren’t exclusively super wealthy. Instead approximately 59% of high savers were considered top earners (meaning their income is in the top 20%) while the other 41% had incomes below that threshold. Still it was discovered that 29% of households had less than $1,000 saved. Moreover the median savings among those in the bottom 40% of earners was $0.
Overall these latest figures from Magnify Money paint an interesting picture of how Americans are or aren’t saving. Once again it seems that many households are unable to build a proper emergency fund or other savings to prepare themselves against unexpected expenses. At the same time it seems that those are able to save are doing so as total savings deposits are on the rise. Hopefully, with the growing economy and other positive factors at play, not only will savings among the wealthy begin to increase but also among lower earners that need the financial cushion even more.