Poll Compares Savings Between Generations and Outlines New Rules for Retirement Planning

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In a recent poll, 70 percent of respondents believe they are as good as or better at saving than their parents. However, with average savings account rates below 1 percent, today’s savers are still far behind the last generation. The new reality is that Americans must follow different rules to accumulate the same amount of wealth their parents did, particularly for major financial goals such as retirement.

These days, successful saving, amid measly bank rates below 1 percent, means following a new set of rules. releases results of a poll in which most respondents believe they are as good as or better than their parents at saving money. But savings data and retirement surveys of American workers suggest that these perceptions are overly optimistic. The savings habits of the current generation of American workers trail those of their parents’ generation.

The poll found that 49 percent of respondents believe they are doing a better job of saving money than their parents. Another 22 percent said they were saving as well as their parents, and 30 percent believe they are “worse” or “much worse” at saving money than the previous generation.

Those results are contrasted sharply by the Bureau of Economic Analysis’ personal savings data, which show that Americans’ personal savings rate averaged only 3.48 percent of income over the previous 10 years, despite a bump up to 5.8 percent in 2010. Even the recent 5.8 percent high doesn’t come close to matching the 10-year average personal savings rate of 9.63 percent in 1981.

“The 1980s were famous for many things…mullets, parachute pants, fluorescent colors and building your own dynasty, thanks to high interest savings account rates of 14 percent or more,” says Richard Barrington, personal finance expert at and author of the poll analysis. “These days, successful saving, amid measly bank rates below 1 percent, means following a new set of rules.”

Barrington’s analysis shows just how big a barrier today’s interest rates are to savers. According to Federal Reserve data, 3-month CD rates were above 14 percent in early 1981. Those same CD rates were well below 1 percent in the first quarter of 2011. Savings account interest rates and money market rates have suffered similar declines. Lower interest rates require individuals to save a far larger share of income to accumulate the same amount of wealth.

Barrington proposes a new set of rules for retirement planning:
1 - Saving more to make up for weak growth
2 - Keeping expectations low – calculating savings plans assuming today’s modest rates and factoring in diminished stock market expectations
3 - Building savings into a monthly budget
4 - Heeding tough lessons learned by the last generation – remaining frugal to get ahead in good times when rates are high, in anticipation of rates heading south again
5 - Carefully selecting the best savings account by life stage and comparing high interest savings account rates online

For more analysis and details of Barrington’s recommendations for retirement saving, read “CD rates up to 14 percent: How to save like it’s 1981” at

For over a decade, has been a leading consumer resource helping people quickly and easily discover the best rates on savings accounts, money market accounts and certificates of deposit (CDs). With daily rate updates, no-nonsense savings advice and in-depth bank information, the site has been featured at,, and

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Jessica Cultra

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