It’s not uncommon for Americans to feel like they’re not saving enough for retirement — no matter their age or income level.
But earning a higher salary can help you save more, as long as you increase your contributions along with your income. So it may not be surprising that workers with higher incomes tend to have higher 401(k) balances, according to newly released data from asset management firm Vanguard.
The median balance of defined contribution plans — which are employer-sponsored retirement plans like 401(k)s or 403(b)s — among workers making between $100,000 and $149,999 is nearly double what workers making $50,000 to $74,999 have invested, per Vanguard. The firm examined data from nearly 5 million participants across its defined contribution plans.
Here’s how much workers have in their retirement savings plans at each income level.
Notably, the average balances are significantly higher than the median balances. The median is often a more representative figure, however, because averages can be skewed if a small number of participants have significantly higher or lower amounts invested.
And keep in mind these figures only represent savings held in Vanguard defined contribution plans. Investors may have additional retirement accounts with other plan providers or separate brokerage accounts.
Americans are saving money earlier and ‘more consistently’
Despite ongoing macroeconomic uncertainty like stubbornly high prices and recession fears, many Americans have prioritized their long-term financial goals through retirement account contributions.
“There has been persistent, year-over-year progress in retirement savings behaviors,” David Stinnett, head of strategic retirement consulting at Vanguard, told CNBC Make It in an email. “Seemingly regardless of market and economic conditions, we find that workers are getting started saving earlier, saving more of their paycheck, and investing their savings in age-appropriate asset allocations more consistently.”
Regardless of income, one factor that has helped boost savers’ balances is automatic enrollment. Employees with 10 or more years of tenure who were automatically enrolled in their company’s retirement plan had median account balances roughly 60% higher than those who had to opt-in to contributions, the same Vanguard study found.
The median balance among auto-enrolled investors with at least 10 years of service was $192,372 in 2024, compared with $121,094 for voluntary enrollees.
“We’re encouraged by how employers design their 401(k) plans to make it easy for workers to save and invest for retirement, and automatic enrollment is a big part of that,” Stinnett said.
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