The average 401(k) savings rate is at record-high levels, report finds

The average 401(k) savings rate has maintained a document excessive, as some retirement plans make it simpler for employees to enroll and contribute.

In 2024, the common mixed financial savings price for worker deferrals and firm deposits was an estimated 12%, based on Vanguard’s newly launched yearly evaluation of greater than 1,400 qualified plans and almost 5 million contributors. That share matched record-high ranges from 2023.

A separate report from Constancy additionally famous all-time high 401(k) savings rates, with the mixed employee and firm price climbing to 14.3%. These findings mirrored 25,300 company plans with 24.4 million contributors throughout the first quarter of 2025.

Regardless of some years of inventory market volatility, Vanguard’s stories have proven a “relentless optimistic pattern line” throughout plan participation, financial savings charges and investing, Dave Stinnett, the corporate’s head of strategic retirement consulting, mentioned throughout a press name Monday afternoon.

Over time, retirement plans have added options like automatic enrollment and speedy eligibility for worker contributions, which have boosted participation, specialists say.

Automated enrollment indicators staff as much as contribute to plans except they choose out. However some corporations have ready durations earlier than staff can contribute to the plan.

In 2024, 76% of plans provided speedy eligibility for worker contributions, up from 71% in 2020, Vanguard reported. Some 61% of plans included computerized enrollment in 2024, up from 54% 4 years prior.

For 2024, the mixed employee and firm 401(okay) financial savings price was inside Vanguard’s “rule of thumb,” based on Stinnett. Vanguard suggests saving 12% to 15% of your pay per yr, together with employer contributions, relying in your earnings.

(In the meantime, Constancy recommends a 15% benchmark, so its current document was nonetheless shy of that focus on.)

“Guarantee that that pattern retains going larger and better,” Stinnett mentioned.

For 2024, the common worker deferral price was an estimated 7.7%, and one-quarter of contributors saved 10% or larger, based on the Vanguard report.

An estimated 14% of employees maxed out 401(okay) plans in 2024, Vanguard discovered. These employees have been sometimes older, with larger incomes, bigger account balances and longer tenure with their employer.   

Nonetheless, the best financial savings share is dependent upon a number of elements, based on licensed monetary planner Trevor Ausen, founding father of Genuine Life Monetary Planning in Minneapolis. 

“I do not observe a single goal retirement financial savings price throughout the board,” he mentioned. It is dependent upon “the shopper’s present monetary place, life-style expectations and timeline to retirement.” 

The proportion might additionally change in the event you’re anticipating a pension, aiming for early retirement or plan for part-time work in your golden years, Ausen mentioned.

Nonetheless, advisors sometimes advocate deferring at the least sufficient to obtain your full employer’s matching contribution.

Employer matches can range extensively, so it is vital to evaluate your plan paperwork.

The most well-liked 401(okay) match system — utilized by 48% of corporations on Constancy’s platform — is 100% for the primary 3% an worker contributes, and 50% for the subsequent 2%.

For 2024, most Vanguard plans used a single-tier match system, similar to 50 cents per greenback on the primary 6% of pay, the corporate reported.