More and more Americans are defaulting on loans and digging into their savings, including their retirement accounts, to keep up with persistent inflation. On Thursday, “Morning Joe” economic analyst Steve Rattner broke out his charts to show the desperate measures some Americans are taking.
“Savings is obviously of critical importance to Americans,” Rattner explained. “It’s how you pay for future obligations: education, houses.”
The former Treasury Department official used data from the Bureau of Economic Analysis to talk about “what’s been happening to the savings rates of Americans as they face this affordability problem, the pressure of inflation on their ability to maintain their living standards.”
According to the data, Americans’ personal savings rate — the after-tax income they put away for future expenses — has fallen dramatically over the past five decades, hitting what Rattner referred to as a “rock bottom.” In the 1970s, the average personal savings rate was 12.2%. In 2026, that average is just 2.6%.
He also examined changes in emergency savings. At the end of 2025, 21% of Americans said they had more emergency savings compared with the year prior, while 29% said they had less.
Rattner said Americans have been “kind of tap-dancing” to be “able to maintain some semblance of their lifestyle.” That includes taking desperate measures, such as dipping into retirement savings.
“The percentage of Americans taking money out of their 401(k) has more than tripled since 2020 — still a relatively low number, but it’s gone all the way from 1.7% to 6% as people have had to grapple with the effects of inflation,” he said.
The “Morning Joe” economic analyst also pointed to mortgage delinquencies, which have increased for all Americans, but especially those with the lowest incomes.
“This shows very clearly that this kind of pressure that we’re looking at on savings exists more heavily in the lower incomes, not surprisingly, than it does for those closer to the top,” he said.