By Annex Wealth Management

The Survey of Consumer Finances, a recently released study from the Federal Reserve – widely considered the gold standard of information on income and wealth – revealed some powerful insights on what sort of savers Americans are today.
In general, the survey showed that Americans are in a better place than they’ve been over the past decade. Compared to past surveys, key indicators like median income and median wealth are on the rise.

Incomes may be up – the study that families without high school diplomas experienced larger proportional gains in incomes than other families – but savings aren’t increasing across all income levels.

Researchers combined 401(k) balances with IRA balances for individuals, and found that younger age groups actually saved less than in previous years. Working households aged 55 to 64 saw balances increase over twenty percent, to around $135,000.

One of the worst developments revealed in the survey: it appears many of the poorest Americans aren’t saving. Over half of Americans don’t have a retirement account of any kind.

Meanwhile, the wealthiest fifth of Americans increased their savings by over 70% since 2013. Over half of the wealthiest quintiles of Americans use retirement accounts, while about 25% of the poorest Americans have one.

Many Americans believe that saving is something you do after you’ve paid debt down, but two researchers now believe that there may be a psychological benefit to saving even if you have a debt load.

Two Texas researchers studied whether paying down debt or building up investment returned a higher feeling of satisfaction. Their research looked at over 800 people aged 50 and older over a number of years.

Their research showed, as you’d expect, that those with a heavy debt load were unhappy. But lightening their debt load didn’t make them any happier. Building up investment outperformed reducing debt in terms of psychological benefit.

Saving can be a bit like dieting. Sometimes, it’s tough to do without a clear goal and a plan on how you’ll get there. But it appears the satisfaction you’ll experience could be worth it.

If you’ve been neglecting your retirement savings, the time to start thinking and planning about your retirement is now. For guidance on growing your savings, or tips on how to get started, find an advisor committed to independence who will work with you to help build a real financial plan.