Some people are frugal and save a lot for retirement, while others choose consumption over thrift during their working years. And those categories don't correlate with income levels. Plenty of high-earning families save extremely little, while low-earners manage to put away quite respectable sums.

Those are the findings of Steven F. Venti of Dartmouth University and David A. Wise of Harvard University. The researchers split up the population of people nearing retirement into 10 groups, or deciles, based on their lifetime incomes.

• The fifth-lowest income decile had median lifetime income of about $740,000 in 1992 dollars.

• The savings of people in that group varied from $443,000 for good savers to $12,500 for bad savers.

• Good savers are families whose savings were higher than all but 10 percent of families in the income group -- while bad savers were defined as those whose savings were lower than all but 10 percent of families in the group.

• Chance events made little difference in savings totals -- whether they be positive, such as collecting an inheritance, or negative, such as poor health.

The decision to invest in higher- or lower-yielding investments had only a minor effect compared to the decision to save or not.

Venti and Wise are critical of the effect of some government policies on savings programs -- policies such as high estate taxes, allowing people spend down their assets to qualify for Medicaid, and taxing away the Social Security benefits of retirees whose incomes are high because of dividends and capital gains.

Aside from being unfair, they say, these policies send young people a signal that it is not worthwhile to save.

Source Peter Coy, "To Save or Not to Save," Business Week, May 8, 2000.