Category Saving

Shrinking Savings Target: America’s Retirement Reality Check

In 2025, the retirement savings target for most Americans, called the "magic number," dropped to $1.26 million, a decrease of $200,000, showing a shift in how people see their long-term financial needs. Although the magic number fell, many still doubt they can save enough money for their retirement. A significant portion of Generation X has especially struggled, with about half reporting they have saved no more than three times their current yearly income, far from reaching their retirement goals. Younger generations like Millennials and Generation Z have somewhat stronger savings ratios, but the majority still worry about running out of money in retirement. These concerns are heightened by rising inflation, unstable financial markets, and uncertainty around public retirement programs.

The “Boomerang Burden”: How Rising Costs Keep Parents Funding Adult Kids

In 2025, many parents are facing significant financial strain from helping their adult children with living costs, due largely to rising rent, inflation, and economic uncertainties. Nearly half of parents now provide their grown kids financial support—spending around $1,474 per month, an amount far exceeding what they typically save for retirement. Financial experts like Dave Ramsey highlight that this increase in parental support could negatively impact parents' retirement plans, forcing many adults to delay their own important financial goals. Young adults are struggling to find economic independence in this challenging climate, with national rental averages reaching $1,850 per month, adding further difficulty to their financial stability.

Act Fast: Lock in High CD Rates Before They Drop!

Currently, savers have a limited opportunity to secure strong returns through high certificate of deposit (CD) rates, as interest rates remain elevated but may soon decline. Certificate of deposit rates today still offer attractive earnings—up to around 4.5% for shorter 18-month durations and between roughly 4.28% and 4.40% for longer terms. These high rates result from past Federal Reserve hikes meant to control inflation. However, recently the Fed has started to lower rates, and experts predict more cuts coming later this year and possibly into next. That means savers looking to lock in good savings returns should act quickly to take advantage of currently available CD rates before they fall further.

CD Rates Shine Bright Amid Stable Economy and Cooling Inflation

As of May 2025, the personal finance environment in the U.S. looks stable despite some economic uncertainty. Certificate of Deposit (CD) rates are particularly good right now, with some banks offering about 4.41% annual percentage yield (APY) for a six-month CD, which is roughly double what is typical nationally. Even though the Federal Reserve lowered interest rates three times in 2024 to encourage economic growth, they've now decided to pause any further cuts in 2025. This pause helps balance economic growth without causing inflation to rise too quickly. Inflation itself has steadily gone down, reaching 2.3% in April, just slightly above the Fed's ideal level of 2%. For careful savers, this means it's a good time to save money using CDs, as they can earn good returns even while the economy settles into a more steady situation.

High-Yield Savings Shine as Safe Haven Amid Inflation and Market Turmoil

As of May 2025, high-yield savings accounts are still offering strong interest rates of around 5% APY. These accounts stand out as attractive choices because they offer people a safe way to earn higher returns on their savings, especially as the overall economy faces uncertainty due to inflation and global financial instability. At this time, prices for gold have reached record heights, climbing more than 25% this year alone, reflecting investors' worries about inflation and unstable financial markets. This situation has led many consumers to consider saving money in high-yield accounts instead of relying on riskier investments, like stocks, which have recently experienced significant ups and downs.

Fed Holds Rates Steady: Savers Enjoy High Yields While They Last

As of May 2025, the Federal Reserve has decided not to change interest rates for the third meeting in a row, causing high-yield savings accounts to keep offering high APYs (Annual Percentage Yields), some as high as 4.40%. Most economists think that interest rates might start dropping later this year. Because of this, financial experts suggest people look for high-interest savings accounts now, rather than trying to guess what will happen later. Some banks and credit unions even have special promotions with interest rates above 5%, but these typically come with restrictions, like meeting certain membership qualifications or limits on deposits.

Trending now

Budgeting and Saving
Debt Management
Side hustle ideas to boost income
Investing basics for beginners