The typical employee needs to save 16% of income -- including an employer match -- starting at age 25 to have enough to retire at 67, according to the 2018 Retirement Income Adequacy Study from the insurer Aon

If you're not close to saving this much, you're not alone. In fact, the average employee who contributes to a retirement savings account is setting aside around 8% of pay. But savings rates vary quite a bit -- from about 4.4% of income to 12.6% -- among different demographic groups, the study shows. 

How do you match up with others in your income and age brackets? Read on to find out. 

Tipped over jar labeled 401(k)

Image source: Getty Images.

Average savings rates by age and income

The table below shows saving rates by age and income for employees contributing to retirement plans, according to the study referenced above. 


Income Under $30,000

Income From $30,000 to $60,000

Income From $60,000 to $90,000

Income From $90,00 to $120,000

Income of $120,000 or Higher

Under 30






30 to 40






40 to 50






50 to 60






60 and up






As you can see, average contributions tend to go up along with age, and people with higher income also tend to contribute a larger percentage. But no group is contributing the recommended 16% of income needed to retire with sufficient assets at 67. 

In fact, the researchers found that just 13% of all contributing employees were saving 13% or more. These so-called "super savers" are projected to have ample funds for a secure retirement. 

What can you do to increase your savings rate?

Whether the amount you're saving is above or below average for your age group and income level, chances are good that there's room for improvement in how much you're putting aside for the future.

The good news is, there are lots of ways you can inch your savings rate up over time. Some things you could try include:

  • Saving your raises: Each time you get a salary hike, increase automatic contributions to your retirement savings accounts by that amount. If you do this before you ever get your first increased paycheck, you won't miss the money. 
  • Make a budget focused on saving: If you can limit spending on other things, you can devote more money to saving for retirement. 
  • Consider making gradual increases to the amount you save: If you increase your automated contributions by 1% to 2% at a time, you may not notice the drop in income very much. But these small amounts of additional savings can add up. 
  • Take on a side gig: If you can work for a few extra hours a week, you could potentially earn hundreds of dollars of extra funds to save for your future. 

The more steps you can take to increase the percentage of your income you're setting aside for retirement, the better off you'll be. 

Start working today to get your savings rate above the average

It's good that the data shows people are increasing their savings rate as they age. But the reality is that saving as much as possible when you're young is important to make compound interest work for you. So don't wait until you're in your 40s, 50s, or 60s to get serious about saving for a more secure tomorrow.