Whoohoo! It seems that we as Americans are finally saving more. It just happens to not be in our employer-sponsored retirement plans. That is according to retirement market researcher Hearts & Wallets.
According to the report the average annual household savings increased almost a full percentage point to 5.5 percent last year, up from 4.6 percent in 2013. This again is based on Hearts & Wallets’ annual survey of 5,500 U.S. households. It seems that this is directly at the expense of employer-sponsored retirements plans like 401(k)s. Which fell 7 percentage points to 22 percent in 2014, and households participating in employer-sponsored plans declined to 56 percent last year from 60 percent in 2013.
It seems the devastating effect of the recent financial woes has America more concerned with having an emergency fund available then tax deferred retirement saving. Of which I can completely understand.
Once upon a time the HELOC was used as an emergency fund by a number of people. But with the anticipated Fed interest rate increase, cash is becoming “king” again.