Groundbreaking research from a collaboration of the Employee Benefit Research Institute and J.P. Morgan Asset Management is the first to use a unique set of data on actual spending and savings behavior to provide a holistic financial view of U.S. households. In this inaugural report, the first in a series, we focus on retirement savings. Why do some people save more than others, even when they have equivalent income?
Despite having similar salaries, the middle 50% of our research population save about 3% more of their salary at all ages than the bottom 25% of savers. For the first time, we can point to specific categories of spending that are constraining the ability to save more. Low savers generally spend more as a percent of salary on housing, transportation and food and beverage, and less on travel.
We hope our important new research will be useful for policymakers, plan sponsors and plan providers as they look to facilitate better retirement outcomes.
Despite having similar salaries, middle savers save about 3% more of their salary at all ages than lower savers, and end up with meaningfully higher 401(k) account balances