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?" is one question many people end up asking themselves.
Vanguard just released its "How America Saves 2025" report, and it can help you answer that question. As one of the country's largest asset management companies, Vanguard has shared 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.
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. 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 provides 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.
This 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. But a full 95% of participants making $150,000 or more were enrolled.
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%. This trend remained in place through all of the age brackets, though higher earners were far more likely to voluntarily enroll than those with lower wages.
And all of this has a big impact on the amount that participants save. Younger workers generally had smaller balances than older workers. This dynamic did not change until retirement age (65 and older) as plan participants begin withdrawing from their accounts.
The average or the median?
Before digging into actual account balances across age groups, it's important to understand the difference between average and median figures.
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. 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.
This is where a median can be helpful. It represents the middle value of all the numbers in question (after sorting from smallest to largest). 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.
You can see the big difference between average and median values across every age bracket. You can also see how balances tend to increase with age.
If you don't match up, take a deep breath
Some savers 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. For those in the latter, don't let that fact get you down. Saving and investing 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 like an IRA or high-yield savings account.
Image source: Getty Images.
Meanwhile, the report noted the average contribution rate (the percentage of one's salary going to a 401(k) or similar plan) was 7.7%, with a median contribution rate of 6.8%. This is not a situation where workers are commonly maxing out their yearly contributions. 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).
A couple of tricks for increasing your contribution may help. 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 approach 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-home pay.
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. 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.
A valuable yardstick, now do something with the data
At the end of the day, "How America Saves 2025" is just providing you with data. The report is not necessarily representative of all retirement accounts, just those administered by Vanguard.
The real question is what you do with the data. If you're doing well on the savings front, congratulations and keep at it. If you're currently falling short of where you want to be, don't be discouraged. The data here can provide you with a goal and the motivation to get there.
