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Strategies & Market Trends : John Pitera's Market Laboratory

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To: Hawkmoon who wrote (3420)	3/8/2001 5:56:03 PM
From: Doppler	Read Replies (1) of 33421

FYI- The Personal Savings Rate does include 401K contributions. Unfortunately those savings are currently being negated by the high levels of consumer debt which offset it in the gov't calculation. The personal savings rate for November was –0.8%, the lowest it's been since the government started tracking the number in 1929. When the savings rate is negative, consumers are financing their consumption by tapping sources other than their current income—for example, borrowing, selling assets, or spending past savings. Here is another quote from a Vanguard article on the savings rate. Perhaps the most important thing to understand is how investments are counted. The savings rate does include your contributions to both IRAs and employer-sponsored retirement plans, such as 401(k)s, but it doesn't include any employer match. It also excludes any capital gains (i.e., appreciation) on your investments. If your portfolio gained 10% last year or has grown 30-fold since you started contributing, that accumulation is invisible to the savings rate. I guess the bottom line is that Americans have been spending money faster than they make it, or put it away for retirement.

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