Spend or Save?
As you may imagine, people with high incomes save more money than people with low incomes. The poor don’t save at all, while families in the higher income brackets do most of the saving. Many economists, financial planners, and public officials have expressed concern that the U.S. personal savings rate—the amount of disposable income that an individual saves instead of spends—has plummeted over the past 40 years. Indeed the overall personal savings rate (personal savings as a percentage of disposable income) fell from 9.6 percent in the 1970s to 8.6 percent in the 1980s to 5.5 percent in the 1990s to 2.9 percent in the 2000s.
THE REAL WORLD
Those concerned about the savings rate usually worry more about the long-term well-being ...