1 in 5 Didn’t Save in 2021

A study says a significant part of the population was unable or save money in 2021.

While a stronger labor market and an early stimulus check helped many Americans contribute to their savings over the past year, a study says a significant part of the population was unable or save money in 2021.

Nearly two-thirds (66%) of survey respondents in the latest MagnifyMoney Savings Index said they saved $5,000 or less in 2021, but almost 1 in 5 (18%) reported they didn’t save any money at all.

Of those Americans who didn’t save money in 2021, more came from older generations. In fact, 22% of Generation Xers (ages 41 to 55) and 21% of baby boomers (ages 56 to 75) didn’t save, compared with 16% of millennials (ages 25 to 40) and 14% from Generation Z (ages 18 to 24).

Each month, MagnifyMoney surveys consumers to find out whether they added money to their savings — and to determine what they’re saving for. The results comprise the monthly MagnifyMoney Savings Index, which began in October 2019.

For the December 2021 edition, MagnifyMoney commissioned Qualtrics to conduct an online survey of 2,100 U.S. consumers from Dec. 9 to Dec. 13. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control. Among the key findings for 2021:

  • Nearly 1 in 5 Americans didn’t save any money in 2021. However, most consumers (48%) were able to put away as much as $5,000 in the past year.
  • At the monthly level, men were more likely than women to save money each month during 2021.In December, 47% of men added to savings, compared with 31% of women.
  • Overall in December, 39% of Americans added money to savings, while 20% withdrew funds.That’s an improvement over December 2020, when 33% saved money and 25% withdrew it.
  • Looking at withdrawals, fewer Americans pulled money from their savings in 2021 than in 2020.The percentage of Americans who withdrew funds from savings never surpassed 20% in any month in 2021, versus seven different months in 2020.
  • In 2022, about 30% plan to open a new savings account.But only 8% of Americans in 2021 kept most of their savings in a high-yield savings account.

General savings, emergencies and retirements were the top reasons listed for saving in 2021; however, savings priorities change substantially for those who have children younger than 18. Compared to those whose children are all 18 or older, parents with kids younger than 18 tend to save more for a new house (20% versus 6%), holiday spending (23% versus 10%) and a new car (20% versus 9%).

As 2022 arrives, many Americans are putting together their financial plans for this year. Some new economic challenges arose in 2021 as inflation — caused partly by pandemic-related supply constraints — increased the value of goods by almost 7% over the past year. Child tax credits and a pause on student loan payments helped boost household budgets in 2021.

“It looks likely that deposit rates will rise in 2022,” said Ken Tumin, founder of DepositAccounts. “The Federal Reserve has accelerated its move toward Fed rate hikes in 2022. If 2022 Fed rate hikes take place, widespread deposit rate hikes should occur.”

Full survey findings can be found at magnifymoney.com/blog/news/consumer-savings-index/.


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