New Measures of Economic Security and Development: Savings Goals for Short- and Long-Term Economic Needs

The long-term economic security and development of a family depend largely upon saving and asset accumulation, yet most measures of economic well-being focus on short-term consumption needs. In this study, we take a broader view by specifying four types of savings goals for US families: precautionary, retirement, homeownership, and education goals. This study develops methods of calculating these savings goals for different types of families under various assumptions, using information from various sources. Our calculations also consider investment gains and differences in dollar values over time. We show that families should save between $155 and $572 every month to address all four savings goals. We find that the number of children in a family affects total monthly savings goals considerably but that the number of adults has limited impact. Savings goals can assist families in making financial plans and provide savings targets useful in development of policy.