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Americans Can Save A Lot Of Money If We Want To, Don’t Worry!

During the pandemic, we learned that Americans can save a lot more money if we want to. Take a look at the historical American personal saving rate chart according to the U.S. Bureau of Economic Analysis and the St. Louis Fed.

American personal saving rate chart percentages

After lockdowns began on March 18, 2020, the U.S. personal saving rate skyrocketed from a respectable 9.3% pre-pandemic to an impressive 33.8% in April 2020! Americans suddenly decided that saving money during a time of great uncertainty was a priority. So that is what we did.

As the initial six-month shock of the pandemic began to wear off, Americans decided to lower our saving rate to 13.3% in November 2020. Then, when news of a new strain of COVID emerged in the beginning of 2021, Americans decided to increase our saving rate again, reaching 26.3% in April 2021.

Since April 2021, the personal saving rate has steadily declined thanks to vaccines, experience, and the desire for most of us to get on with our lives. Today, the U.S. personal saving rate is around 3.1%, which is a low not seen since January 2008.

Americans Can Save More If We Want Or Need To

Since 2009, when I first started writing on Financial Samurai, I’ve noticed some people like to bag on the state of America’s personal finances. I was one of them, with posts such as Retirement Savings By Age Show Why We’re Screwed.

At the time, I thought to myself: How is it possible the median retirement savings amount for 32 – 37-year-olds was only $480 using 2013 data? Meanwhile, the median retirement savings amount for 56 – 61-year-olds was only $17,000. Surely, Americans would be in a world of hurt when we are older, no?

median retirement savings by age

I got fired up to write more personal finance articles to help people save and invest more for their future. But what I realize now is I simply hadn’t lived long enough to see how well people can adapt.

Almost a decade has passed and the typical retired American is not screwed. We’re not hearing about a retirement crisis where 60+-year-olds are getting thrown on the streets because they don’t have enough money to pay their bills.

Instead, the typical American has grown wealthier. We might not be happier, but at least as a whole we’re more financially secure than in the past.

Why Are Americans Doing So Well?

Despite paltry median retirement savings amounts, the typical American is doing fine.

The majority of Americans have benefitted from an extraordinary rise in home prices since 2013. The combination of rising home prices, rising home equity, and declining mortgage balances is a huge win for the ~68% of Americans who own real estate.

Home equity - Why Americans are doing so well
Median home prices - why Americans are doing so well

For the 32% of Americans who don’t own real estate, the common belief is that renters save and invest the difference. Thus, the stock percentage ownership amongst renters may be even greater than the estimate that 56% of all Americans own stock. Stocks have also had a fantastic run since the 2013 Consumer Finance Report.

Real median household income also bottomed in 2012 at around $60,000. In 2021, real median household income peaked at around $71,000.

Real median household income

Finally, both federal and state governments have been supportive during the pandemic. They’ve injected trillions of dollars into the economy via stimulus checks, PPP loans, and more.

Recommended Saving Percentage For Financial Freedom

Whenever someone asks me how much they should save to get to financial freedom, my default answer is 50% of your after-tax income.

A 50% saving rate means that every year you save is one year of freedom bought. Save 50% for 20 years and you’ve bought yourself 20 years of freedom on the back end. The math is intuitive and easy.

A more nuanced recommended saving percentage answer is to have everybody max out their tax-advantaged retirement accounts. Once that is done, save at least 20% of your after-tax, after-retirement contributions income.

Maxing out your 401(k) should become automatic. Your focus should be on building as large of a taxable investment portfolio as possible. It is your taxable investments that will spit out enough passive income so you can live more freely.

Your saving rate will be determined by your income and your expenses. But your saving rate will also be determined by how badly you want to retire early and do something new. As we’ve seen in the personal saving rate chart by the St. Louis Fed, we can save more if we want to.

Financial Freedom Saving Rate Recommendation Chart

Here is my financial freedom saving rate chart from Buy This, Not That. My book has plenty of charts that can be used as financial coaching guides to help you build more wealth in a risk-appropriate way.

Recommended saving rate chart by age

Don’t Count Out The American Saver

No longer do I believe the typical American is going to face a difficult retirement. Many of us have the ability to save more money when situations deem it necessary. We will also rationally spend more money when we feel more secure.

Think about it. If your doctor told you there is a 90% chance you’ll die within one year if you don’t lose 10 pounds in the next three months, don’t you think you would do everything possible to lose weight? Most able-bodied people would.

Don’t count out free will!

We can also accept the new three-legged retirement stool where we rely only on ourselves for retirement. Relying on other people to save us is not a good financial strategy!

Then, when we reach a traditional retirement age, Social Security provides us with an added “bonus.” The maximum Social Security benefit is over $4,200 a month in 2023. Surely, most of us can live just fine off $50,000 a year once our homes are paid off.

We May Be Saving Too Much

For personal finance enthusiasts who read Financial Samurai, we will likely die with too much money. A lifetime of frugality and savvy investing is hard to change. Therefore, we must work on decumulating our wealth so we don’t ultimately waste our youth.

Of course, there will always be people hurting for money. But I’m confident these people will rationally take action to improve their financial situation over time.

With so many free resources online and affordable personal finance books to read, personal finance education is heading up and to the right! The average person will rationally take the right steps to improve a suboptimal situation.

Reader Questions And Actions

Readers, do you believe Americans can save a lot more money if we want to? Why do you think Americans don’t save more money like citizens from other countries do? Is our low saving rate a sign of financial health? What is your personal saving rate?

For more nuanced personal finance content, join 55,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. 

Americans Can Save A Lot Of Money If We Want To, Don’t Worry! is written by Financial Samurai for

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IRS Out For Blood More Than Doubling Penalty Interest

IRS taxes increase

In a blatant act of financial tyranny, the IRS is intensifying its assault on hardworking Americans by shamelessly jacking up the interest penalty on underpaid taxes from a pitiful 3% to an exorbitant 8%. This calculated move, recalibrated quarterly, serves as a stark reminder of the insatiable appetite of the IRS, an oppressive behemoth relentlessly extracting every last penny from citizens already shackled by burdensome taxation.

Specifically targeting non-corporate taxpayers, the IRS demands the federal short-term rate plus an additional three percentage points, a blatant money grab that directly targets struggling self-employed individuals, independent contractors, and gig economy workers. These individuals, already grappling to make ends meet, find themselves in the crosshairs of a government voraciously hungry for more of their hard-earned wages.

For those daring to resist this blatant financial coercion and falling short on their payments, brace for the punitive underpayment penalty. There’s a meager concession – if the amount due is under $1,000 after begrudgingly considering credits and other tax factors, citizens might receive a temporary reprieve from the claws of the taxman.

This audacious maneuver puts the self-employed and independent contractors in the IRS’s oppressive grip, coercing them to make quarterly estimated tax payments under the looming threat of severe financial retribution. The January 16, 2024 deadline for the fourth quarter of 2023 is fast approaching – a date that casts a dark shadow over those grappling with the suffocating weight of government overreach.

While the regular W-2 employees might momentarily sigh with relief as taxes are conveniently siphoned from each paycheck, tax experts issue a stern warning against such complacency. Joseph Doerrer, a CPA and financial planner from New Jersey, challenges individuals to scrutinize their tax situation, posing the provocative question, “Are you where you should be?” A question that echoes as a stark reminder of the government’s overreach into the pockets of hardworking Americans.

One taxpayer, Sameet Durg, found himself blindsided by an underpayment penalty reaching into the thousands – an unwelcome surprise that serves as a chilling testament to the relentless demands of the IRS. Durg, a marketing executive, now watches his finances with unwavering vigilance, refusing to endure a hefty hit come April.

As the IRS unabashedly cranks up the interest penalty, taxpayers are left grappling with the heavy-handed tactics of an agency that seems insatiable in its quest to confiscate more of their hard-earned money. This move underscores the urgent need for citizens to vehemently resist the oppressive tax regime, actively defy the IRS’s overreach, and reclaim sovereignty over their wages.

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GUILTY! Sam Bankman-Fried Faces Over 100 Years in Prison

GUILTY! Sam Bankman-Fried Faces Over 100 Years in Prison

( – Sam Bankman-Fried has been found guilty of all charges related to the collapse of his Bitcoin exchange, FTX.

“A New York jury in Manhattan federal court agreed with prosecutors that Bankman-Fried defrauded investors, customers and lenders in connection with the collapse of his crypto empire,” reported Fox Business.

“Prosecutors accused Bankman-Fried, who founded and controlled both FTX and sister hedge fund Alameda research, of misappropriating and embezzling billions of dollars in FTX customer deposits, scheming to mislead investors, and instructing other executives at his businesses to do the same,” it added.

Bankman-Fried was charged with five charges of conspiracy and two counts of wire fraud in the first two criminal trials.

The maximum sentence for each crime was 110 years in prison.

The hearing for Bankman-Fried’s sentence has been scheduled for March 28.

The Southern District of New York’s U.S. attorney, Damian Williams, commended the decision and said that Bankman-Fried “perpetrated one of the biggest financial frauds in American history.”

“The cryptocurrency industry might be new, the players like Bankman-Fried might be new,” Williams said. “But this kind of fraud, this kind of corruption, is as old as time.”

NBC News gave some background information and historical context before the decision:

“FTX and Alameda quickly collapsed in November 2022 after some of their financial liabilities were exposed.

The fact that Alameda had taken billions of dollars from FTX’s customers and that much of Alameda’s balance sheet was comprised of digital currency assets it had created was central to the case against Bankman-Fried.

Unnerved by disclosures about the firm’s financial position, many of FTX’s customers tried to get their money back. That set off the equivalent of a bank run.

The value of Alameda’s investments crashed, and FTX couldn’t return much of that money because it had been given to Alameda. Some went to the fund’s lenders, and billions were spent on sponsorships, commercials, and loans to top executives. That, too, was a major part of the case against Bankman-Fried.”

Following the collapse, more FTX and Alameda executives were prosecuted, including former CEO of Alameda Caroline Ellison, co-founder of FTX Gary Wang, and chief technology officer of FTX Nishad Singh.

All three pleaded guilty, agreed to cooperate, and testified against Bankman-Fried.

In exchange for their cooperation, they will receive less severe punishments.

In his defense, Bankman-Fried stated that he never intended to deceive anyone and that, following the failure of FTX and Alameda, the government had been searching for someone to blame.

“Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him,” Mark S. Cohen, counsel to Bankman-Fried, said in response to the verdict.

Williams stated that he hoped the conviction would be an example for others.

“It’s a warning, this case, to every single fraudster out there who thinks that they’re untouchable, or that their crimes are too complex for us to catch, or that they’re too powerful for us to prosecute, or that they could try to talk their way out of it when they get caught,” Williams said. “Those folks should think again.”

Copyright 2023.

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Brutal ‘Bidenflation’ Has 1 in 6 Retirees UNRETIRING

Brutal 'Bidenflation' Has 1 in 6 Retirees UNRETIRING

( – According to an analyst, “Bidenflation” may be a long-term issue, leading one out of every six pensioners to contemplate retiring early.

It will undoubtedly persist if Biden wins re-election.

In the far-left USA Today, Patrice Onawunka laments the possibility that the “financial insecurity” brought on by inflation—which was brought on by “reckless federal spending”—will last forever.


“People have connected the dots between ill-advised government policies and harsh economic outcomes. Spending nearly $2 trillion on government transfers to almost every household during supply-chain disruptions and exacerbated labor shortages caused inflation to accelerate. Putin’s invasion of Ukraine and other production disruptions worsened it.

The Biden administration and congressional Democrats passed a climate change bill that they falsely labeled the Inflation Reduction Act in hopes of fooling Americans, especially seniors.

The bill never addressed rising food, housing, or energy prices — households’ most basic and critical needs. Any climate savings would take years to come to fruition and could be offset by new costs for families — tens of thousands of dollars — on new electric vehicles.

Meanwhile, the green subsidies cost more than three times what the law’s supporters claimed.”

What could be crueler than adopting a law that does the exact opposite and is titled the Inflation Reduction Act?

55 percent of those who have already had to un-retire claim it was because they needed more money.

The White House and corporate media continue to lie to us by promising that the inflation issue will pass quickly, yet nothing ever appears to change.

Everything’s cost is skyrocketing especially housing. Meanwhile, Joe Biden is exerting every effort to keep inflation high. The federal government spends like a drunken sailor, which cheapens money.

Even worse, Biden has permitted countless millions of illegal immigrants to enter our nation, which raises the price of housing by increasing demand for limited items like housing.

Housing is a necessity, Onwuka tells us, unlike other discretionary expenses. Rent costs in America are rising, disproportionately affecting older folks and those with low incomes, especially those on fixed budgets.

In addition, she states that “10 million households headed by people aged 65 or older spend more than a third of their income on housing, and half of these pay more than 50%.”

See what happens when you factor millions of illegal immigrants into the housing problem.

Biden punishes Americans who have lived by the book, paid their taxes, saved money, and worked hard. He is putting the interests of millions of illegal aliens—who raise demand for everything and drive up prices for everything—above the interests of those Americans.

“In a little over four years, I intend to retire. I’ll never be wealthy, but since I started my first 401K in 1994, I’ve been setting money aside for that moment. I enjoy both my job and my coworkers.”

That isn’t the problem. The dream is the problem… the desire to live out your third act with the freedom and resources to do whatever you want.

Similar actions are taken by many working Americans who save money and forgo immediate enjoyment to prepare for their elderly years. As a result, I find it difficult to understand what it must be like to enter a dream before having it destroyed.

The anguish of coming out of retirement, returning to the grind, and facing Monday mornings all over again escapes me.

The only idiots, child abusers, and masochists vote Democrat.

Copyright 2023,

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