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hi, can someone tell me what the US personal savings rate is and how it is calculated?

many thanks

zac

UK fool
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bikemott's question is harder than it sounds, and perhaps experts can direct us to good places to look. I know the question has been batted around a lot on these boards over the last couple of years.

The crudest definition is (gross income - taxes - expenditures)/(gross income - taxes).

The trouble with this is the definition of "gross income". Money that people squirrel away in 401(k) accounts -- and that is many, many billions each year -- is tax-deferred and therefore does not count as income until it is withdrawn, many years in the future. Similarly, paper gains on stocks are not savings, since they have not yet been realized. Both of these ways of counting make sense, and yet they are also absurd in the sense that they don't reflect people's attitudes about how they stand.

I think everybody would count 401(k) balances and the paper value of their stocks in their net worth. But, as I say, I think they have no influence in the calculation of a savings rate.

Here's one that's harder to calculate. What is the present value of a pension that has no death benefit, and which I, and only I, will collect but only if I survive to retirement age?
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Greetings, Zak, and welcome. You asked:

<<hi, can someone tell me what the US personal savings rate is and how it is calculated?>>

It's calculated by the Bureau of Economic Analysis who defines it as personal income less the sum of personal outlays and personal tax and nontax payments. For the methodology, see the BEA's description at http://beadata.bea.doc.gov/bea/ARTICLES/NATIONAL/NIPA/1998/0398niw.pdf.

Regards..Pixy
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for zac:

You might find what you want at these sites:

http://www.asec.org/perssav.htm

http://www.ncpa.org/pd/economy/ecoddb.html

Chips
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JABoa wrote:
Here's one that's harder to calculate. What is the present value of a pension that has no death benefit, and which I, and only I, will collect but only if I survive to retirement age?

Here's my guess for the answer:

The sum, for each year from retirement to infinity, of (Probability you'll be alive) * (Net present value of pension amount in that year).

Of course, calculating an infinite sum can be difficult. But you only need to go up to an age where your probability of being alive is a very small value.

Bob H, aka Blues
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hi, so essentially what you're saying is that share ownership is not calculated into the US personal saving rate figure?

basically I've got a conumdrum to solve....the UK savings rate is currently 9.5%. I've read the US savings rate is 2.1%.

I would have expected the reverse as the US does not have a welfare state and the UK does [well people think it does, its debatable to be honest!]. Therefore I would have expected people in the US to save more as the state does not look after them in their dotage....of course the figures might be calculated totally differently which I'm also trying to work out..

foolish best

zac
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