This Is the Average Vanguard 401(k) Participation Rate by Age, According to a New Report. How Do You Measure Up to Your Peers?
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Personal finance can be both simple and complex, with one of the biggest hurdles being on the emotional side of things. "Am I saving enough. Moreover, " is one question...
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6 min read
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investment
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July 20, 2025
12:00 PM
The Motley Fool
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Personal finance can be both simple and complex, with one of the biggest hurdles being on the emotional side of things. "Am I saving enough
Moreover, " is one question many people end up asking themselves
Vanguard just released its "How America s 2025" report, and it can help you answer that question
Furthermore, As one of the country's largest asset management companies, Vanguard has d data based on the many defined contribution plans that it administers
The data offers a unique snapshot of the savings habits of many Americans, by age, income, industry, and more, in light of current trends
There are several types of defined contribution plans captured in the report, but the 401(k) is by far the most common and makes up the bulk of the included data
On the other hand, Read on to understand how your 401(k) stacks up against your peers
Image source: Getty Images
How much money are Americans putting away
One of the key statistics Vanguard vides in the report is the average plan participation rate by age
In 2024, across the 4. 8 million accounts included in the report, those in the youngest age group -- 25 and below -- had the lowest participation rate and the lowest average account balances
However, the average participation rate rises very quickly with age before peaking and then dropping off as people enter retirement
Age Participation Rate <25 54% 25–34 82% 35–44 86% 45–54 87% 55–64 87% 65+ 79% Data source: Vanguard, amid market uncertainty
This leads to the conclusion that should come as no surprise as young workers are just beginning their careers
In fact, only 31% of those making $15,000 or less were enrolled in plans, given current economic conditions
But a full 95% of participants making $150,000 or more were enrolled, given the current landscape
At the low end of the income spectrum, automatic enrollment played a huge role in participation rate
Voluntary enrollment was just 14% for those making $15,000 or less a year, while plans with automatic enrollment increased that figure to 77%
Additionally, This trend remained in place through all of the age brackets, though higher earners were far more ly to voluntarily enroll than those with lower wages
At the same time, And all of this has a big impact on the amount that participants
On the other hand, Furthermore, Younger workers generally had smaller balances than older workers
Conversely, This dynamic did not change until retirement age (65 and older) as plan participants begin withdrawing from their accounts, in today's financial world
The average or the median (noteworthy indeed)
Before digging into actual account balances across age groups, it's important to understand the difference between average and median figures, given the current landscape
An average takes all of the numbers in a group, adds them up, and divides the sum by the count of numbers in the group
However, this calculation can be skewed by extreme outliers, in this volatile climate
For example, if you have a stadium full of people with a net worth between $50,000 and $100,000 but drop Bill Gates into the crowd, the average would skyrocket well above $100,000 because of Gates' massive wealth
Additionally, This's where a median can be helpful
It represents the middle value of all the numbers in question (after ing from smallest to largest) (noteworthy indeed)
Furthermore, In other words, the median is the value below which and above which half of the numbers in a group lie
With that context, here are the balances for the defined contribution plans in the Vanguard report: Age Average Median <25 $6,899 $1,948 25–34 $42,640 $16,255 35–44 $103,552 $39,958 45–54 $188,643 $67,796 55–64 $271,320 $95,642 65+ $299,442 $95,425 Data source: Vanguard
Nevertheless, On the other hand, You can see the big difference between average and median values across every age bracket
However, You can also see how balances tend to increase with age (noteworthy indeed) (this bears monitoring), in today's market environment
If you don't match up, take a deep breath Some rs will see this data and pat themselves on the back for matching or beating the numbers in the table
Others may feel a pang of concern because they're behind for their age, in today's financial world
On the other hand, For those in the latter, don't let that fact get you down, amid market uncertainty
Saving and is a journey; give yourself a little leeway
For starters, these are defined contribution plans, which may not reflect all of someone's savings, which may include other types of accounts an IRA or high-yield savings account, given current economic conditions
Image source: Getty Images
Additionally, Meanwhile, the report noted the average contribution rate (the percentage of one's salary going to a 401(k) or similar plan) was 7 (quite telling)
Furthermore, 7%, with a median contribution rate of 6
Nevertheless, This's not a situation where workers are commonly maxing out their yearly contributions, given current economic conditions
In fact, just 14% of participants hit the limit last year ($23,000 for those under the age of 50, or $30,500 for those above 50)
However, A couple of tricks for increasing your contribution may help (which is quite significant)
A simple one is to increase your contribution rate whenever you get a raise
That way you don't feel the sting of putting more money away
Another more aggressive apach is to increase your contribution rate by 1% on a regular basis, say once a quarter
That's not a huge change, and you should be able to adjust gradually to the lower take- pay
On the other hand, However, And, of course, if you aren't contributing at all, then you should simply start doing so, even if it's just 1% of your salary
Conversely, It's always a good idea to contribute enough to get your employer match (the vast majority of plans in the report offered one)
That's effectively a guaranteed return on your investment, in this volatile climate
A valuable yardstick, now do something with the data At the end of the day, "How America s 2025" is just viding you with data
The report is not necessarily representative of all retirement accounts, just those administered by Vanguard (an important development)
This tells us that real question is what you do with the data
Additionally, If you're doing well on the savings front, congratulations and keep at it
Nevertheless, If you're currently falling short of where you want to be, don't be discouraged
The data here can vide you with a goal and the motivation to get there.
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