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Experts: Here’s How Much Americans Should Have in Their Savings Accounts in 2024

FatCamera / iStock.com
FatCamera / iStock.com

How much do you currently have in your savings account? For over a third of Americans, this number is $100 or less.

GOBankingRates recently surveyed 1,000 Americans ages 18 and older to learn more about their banking practices and found that 36% have no more than $100 in their savings account. In a similar study conducted in late 2022, 33% of Americans responded they had $100 or less in savings.

Learn More: How Much Money Do Americans Have in Their Bank Accounts in 2024?
Read Next: Use This Checklist To See Whether Your Bank Is Costing You a Lot of Money

Here’s a look at just how much Americans are saving, as well as how much they should be saving.

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How Much Should You Keep in Your Savings Account?

Brandon Robinson, president and founder of JBR Associates Financial Services, said that one of the main reasons to have a savings account is to have funds readily available in case you need them, such as if you have an unexpected expense or lose a job or other source of income.

“A rule of thumb is to carry six to 12 months of living expenses in your savings account,” Robinson said. “If your living expenses — food, utilities, gas, internet, phone, etc. — are $3,000 per month, you’ll need to have at least $18,000 tucked away in your savings. This will provide a financial buffer to cover everyday costs until you recover.”

Jennifer P. Kirby, a fiduciary financial advisor and managing partner of Talisman Wealth Advisors, also recommends having enough savings to cover six to 12 months of essential expenses.

“If you have a more variable form of income — i.e., commissions or occasional work — we suggest erring on the higher side, in case you hit a dry patch,” Kirby said. “That’s the minimum. If you know you have a big expense coming up, like a down payment on a home or a tuition payment, you may wish to put that aside in high yield savings, as well.

“Beyond that, any additional cash could be considered for longer-term investing at levels of risk that correspond to your tolerance and goals.”

Savings by Generation

The GOBankingRates poll found that the age difference between someone who has $10,000 in savings versus those with $100 seesaws significantly. Only 7% of respondents between the ages of 18 to 24 have over $10,000 in savings. The same age group makes up 23% of respondents who said they have $100 or less in savings.

And while many media narratives imply older generations keep more money in savings, only 20% of respondents surveyed between the ages of 55 and 64 said they have more than $10,000 in savings.

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Using More Than One Savings Account

When we see a percentage like 36% of Americans keeping $100 or less in a savings account, it’s important to consider this amount may be in just one savings account. This account does not necessarily make up anyone’s entire financial picture, like what might be in their checking or CD accounts.

Kirby said whether you should have more than one savings account depends on your individual situation.

“Some people like having money in different places; some like to see everything consolidated,” she pointed out. “Some people like savings buckets to segregate money by different goals — a vacation bucket or a house bucket are two examples.

“Having said that, if you have greater than the FDIC limit of $250,000 per account type — i.e., joint versus single name — at one institution, it would be good to consider opening an account somewhere else to make sure you maintain FDIC coverage for all your cash savings.”

While the survey does not indicate whether respondents have multiple savings accounts, GOBankingRates asked whether Americans would ever create different types of accounts across different banks — 62% of respondents said yes.

Is Increasing Your Savings Due to Inflation Necessary?

Kirby pointed out that there’s general inflation and there’s personal inflation.

“It’s personal inflation that drives how much you keep in savings,” she said. “Meaning: during an inflationary period, did your expenses go up? Are these essential expenses? How much are they changing? Are your goals, like purchasing a home, getting more expensive? Once you have those answers, you can determine how much to increase your reserves.”

What About Americans Nearing or in Retirement?

For those nearing retirement or already retired, Robinson said that there’s no set amount you should keep in savings — it depends on your individual financial circumstances. Only 18% of respondents 65 and older surveyed by GOBankingRates said they currently have more than $10,000 in their savings account.

Robinson said that in retirement, you are no longer contributing to retirement accounts. Instead, retirement is focused on income.

“It’s now about preserving and spending what you have saved over the years,” he said. “The same rule of thumb — six to 12 months of living expenses — does not really apply here. Hopefully, you have planned well enough, so your everyday expenses are covered with guaranteed income — Social Security, pension, income annuity, etc.”

Robinson also shared that, in retirement, your savings should be to fund any emergencies that arise or special events that come up.

“There’s no set amount, since it will be different for each individual or couple,” he said. “Determine what the ‘events’ may cost and keep the money readily available.”

Preparing for Market Volatility

Kirby had a bit of a different opinion.

“We suggest that people who are ending their working lives and are about to start relying on their assets should de-risk and have at least a year of essential expenses, maybe two, in highly-liquid, very low- to no-risk asset classes, like FDIC-insured high yield savings accounts, U.S. Treasurys and CDs,” she advised. “It is important for portfolio stability and investor confidence to know that you can weather a difficult market period while still ensuring you have the money you need. Savings accounts are an important part of that strategy.”

What Type of Savings Account Should You Have?

When asked if one type of savings account is better than another, Robinson recommended picking a savings account with the highest interest rate available at a strong financial institution that has low or zero fees.

“Also, shop credit unions that are near you,” he said. “They may offer better rates than the larger traditional banks.”

Tips for Properly Managing a Savings Account

As you work to manage your savings account or accounts, Robinson recommends following these two best practices:

  • When growing and managing a savings account, be consistent with your savings routine. Have a systematic way to automatically deposit funds into your savings account. This way, you won’t be tempted to spend the extra money.

  • Watch and track the balances each month. If you are in a “good” situation, where you have excess funds in the savings account — called lazy money — you can transfer a portion into an investment that can earn a better return.

Heather Taylor contributed to the reporting for this article.

Methodology: GOBankingRates surveyed 1,063 Americans aged 18 and older from across the country between Nov. 27 and Nov. 29, 2023, asking twenty-two different questions: (1) What category best describes your current financial institution?; (2) Have you considered changing banks within the past year?; (3) If you have considered changing banks in the past year, were any of the following factors? (select all that apply); (4) Which feature, perk, or other offering is most important to you when opening an account with a new institution?; (5) Are you currently satisfied with all your banking products and services offered by your bank/credit union?; (6) Would you ever have different types of accounts across multiple banks? (i.e. Checking at Chase, but Savings at TD Bank); (7) What is your most preferred method of banking?; (8) Which of the following is the biggest factor of you staying with your current bank?; (9) Which of the following bank accounts do you currently use/have open? (Select all that apply); (10) How much is the minimum balance you keep in your Checking Account?; (11) How much do you currently have in your Savings Account?; (12) What amount of a sign up bonus would make you consider switching banks?; (13) Have you considered using any app-only banking platforms (aka neobanks) in the past year (e.g. Current, Chime, Dave, etc.); (14) How important is it to you for your bank to be affiliated with a crypto exchange/platform?; (15) In the past year, how often have you written a physical check?; (16) When was the last time you visited your bank in-person?; (17) Why would you choose to visit your bank in-person? (Select all that apply); (18) Have you had an overdraft on your checking account in the past year?; (19) How much do you trust your current bank to act in your best interest?; (20) How much do you trust your current bank to protect your private information?; (21) Do you trust regional banks more than national banks?; and (22) How much cash do you keep at home?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

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This article originally appeared on GOBankingRates.com: Experts: Here’s How Much Americans Should Have in Their Savings Accounts in 2024