Study finds nearly one quarter of families have no savings
A survey through the University of Michigan revealed that 23 percent of responding families had no liquid savings. That survey is among a number that have found a large number of people have little or no savings banked.
Supposedly, the recession has ended and more people are better off than they were several years ago when things were bad. However, a number of studies and surveys indicate that things are not so rosy.
The University of Michigan conducts a survey every two years, called the Panel Study of Income Dynamics, according to the New York Times, which is conducted by the university’s Institute for Social Research. The survey conducts interviews with about 9,000 families. The findings of the 2011 survey have been released. Of the families interviewed, 8,121 of them were interviewed in the 2009 edition.
Among other findings, the survey found 23 percent of surveyed families had no liquid assets, such as savings accounts, checking accounts and deposit accounts. That was a bump from 2009, when 19 percent of respondents had liquid assets.
Lower income groups ostensibly found it harder to add to their liquid assets, as most people who had more in liquid assets in the 2011 Panel Study had at least $50,000 in liquid assets. However, a somewhat encouraging sign was that the number of families with at least $50,000 in assets had increased to 15 percent of respondents in 2011 from 12 percent in 2009.
According to the Detroit Free Press, the report did show a very slight improvement in the number of families who believed they would likely miss a mortgage payment in the near future. In the 2011 survey, 1.7 percent of respondents said that they would, compared with 1.9 percent in 2009. Furthermore, 4.6 percent of respondents said they believed they would fall behind on mortgage payments in the next few months, compared to 6.0 percent in 2009.
However, 10 percent of respondents also had at least $30,000 in non-collateralized debts, including credit card debt in 2011, up from 8.5 percent in 2009.
There are fewer people socking money away. According to the Wall Street Journal, the personal savings rate reported by the Department of Commerce reached 3.8 percent in March. However, that is a significant decline from roughly 7 percent around May of 2009.
Perhaps a more troubling finding was from LIMRA, a financial services trade group, which found that 49 percent of respondents in a survey weren’t contributing to retirement in any fashion, according to CNN. Younger respondents were the most likely to not be contributing, as 56 percent of respondents aged 18 to 34 weren’t putting any money into a Roth IRA or 401(k) account of any sort.