While millions dream of a secure retirement, the harsh reality is that America faces a staggering savings crisis, where the typical worker's nest egg of just over $35,000 is dwarfed by a $279,000 average shortfall and a future where half of all households risk running out of money.
Key Takeaways
- The average 401(k) or similar defined contribution plan balance at Vanguard at the end of 2023 was $134,128 for all participants.
- The median 401(k) balance at Vanguard in 2023 was $35,286 across all savers.
- Average balance for Vanguard participants aged 65+ reached $272,588 in 2023.
- 56% of U.S. workers are covered by an employer-sponsored retirement plan per BLS 2023.
- Participation rate in 401(k) plans among eligible workers: 83% per Vanguard 2023.
- Only 35% of private sector workers had access to DC plans in 2022 per BLS.
- Average employee contribution rate to 401(k)s: 7.4% of salary per Vanguard 2023.
- Employer match averages 4.7% of pay per Vanguard HAS 2023.
- Total contribution rate (employee + employer): 11.9% per Vanguard 2023.
- 44% of Americans say they are behind on retirement savings per Northwestern Mutual 2023.
- Only 53% of Americans are on track for retirement per Fidelity 2023.
- Required savings rate to be on track: 15% of income per Fidelity.
- Median retirement savings for ages 25-34: $10,500 per Census 2023.
- Black households median retirement savings: $42,000 vs $189,000 white per SCF 2022.
- Women aged 55-64 median: $120,000 vs $185,000 men per Empower.
Despite many Americans saving well, most still face large retirement shortfalls.
Contribution Amounts
- Average employee contribution rate to 401(k)s: 7.4% of salary per Vanguard 2023.
- Employer match averages 4.7% of pay per Vanguard HAS 2023.
- Total contribution rate (employee + employer): 11.9% per Vanguard 2023.
- 92% of participants receive an employer match per Vanguard.
- Average deferral rate for ages 55+: 9.2% per Fidelity 2023.
- Catch-up contributions used by 14.5% of eligible over 50 per Vanguard.
- Median contribution rate: 6.8% employee-side per Vanguard 2023.
- Auto-escalation plans see average rates of 8.1% per Vanguard.
- Fidelity clients contribute average $7,000 annually to 401(k)s.
- Roth contribution share: 22% of total deferrals per Vanguard 2023.
- Average employer contribution: $4,890 per participant per EBRI.
- Contribution rates increased 0.4% in 2023 per Vanguard.
- Women contribute 7.1% vs men 7.6% of salary per Vanguard.
- High earners (>$100k) average 9.5% deferral rate per Fidelity.
- After-tax contributions: 4% of plans allow, used by 2% per Vanguard.
- Average annual 401(k) contribution: $8,300 employee per PSCA 2023.
- Employer safe harbor match: 4% in 78% of plans per Vanguard.
- Gen Z average contribution rate: 7.0% per Fidelity 2023.
- 15.2% of over-50s max out catch-up limits per Fidelity.
- Total DC contributions: $650 billion in 2023 per ICI.
- Average IRA contribution: $6,500 per Fidelity 2023.
- Non-highly compensated employees average 6.5% rate per Vanguard.
- Plans with auto-contribution escalation: 53% per Vanguard 2023.
- Average deferral for millennials: 6.9% per Fidelity.
- Profit sharing contributions average 3.2% of pay per PSCA.
Contribution Amounts Interpretation
The collective American retirement strategy appears to be a polite, "I'll have what she's having," as most people hover around the 7% contribution mark, relying heavily on employer matches to nudge the total toward a barely adequate 12%, while a hopeful minority of older workers finally start to panic-save.
Demographic Variations
- Median retirement savings for ages 25-34: $10,500 per Census 2023.
- Black households median retirement savings: $42,000 vs $189,000 white per SCF 2022.
- Women aged 55-64 median: $120,000 vs $185,000 men per Empower.
- Hispanic median savings: $37,500 per Vanguard 2023.
- Gen Z (18-25) median: $5,500 per Bank of America 2023.
- Baby boomers average savings: $884,000 per Empower 2023.
- Single women median: $85,000 vs $150,000 married per SCF.
- Low-income (<$50k) median: $0 per Census 2023.
- High school educated median: $50,000 vs $250,000 college grad per SCF 2022.
- Northeast region median retirement savings: $150,000 per Census.
- Millennial women contribute 0.5% less than men per Vanguard.
- Rural households median: $100,000 vs $180,000 urban per SCF.
- Asian American median savings: $250,000 per Federal Reserve data.
- Ages 65-74 women median: $165,000 per Census 2023.
- Self-employed median: $75,000 per SCF 2022.
- Southern states average savings lower by 20% per Empower.
- LGBTQ+ median savings 25% below average per Human Rights Campaign.
- Ages 75+ median: $130,000 per SCF.
- Married couples median: $250,000 vs $80,000 singles per Census.
- Blue-collar workers median: $45,000 per BLS data.
- Top 10% income earners average $1.2M per SCF 2022.
- Gen X men median: $160,000 vs $110,000 women per Empower.
- Midwest median savings: $140,000 per Census 2023.
- No high school diploma median: $15,000 per SCF.
- Veteran households median: $180,000 per VA report.
- Ages 30-39 median for Blacks: $25,000 per Vanguard.
- West coast average higher by 15% per Census.
- Divorced median savings: $60,000 per SCF 2022.
Demographic Variations Interpretation
These statistics paint a picture of retirement in America not as a single race, but as a series of staggered starting lines where wealth, race, gender, and zip code act as powerful handicaps.
Participation Rates
- 56% of U.S. workers are covered by an employer-sponsored retirement plan per BLS 2023.
- Participation rate in 401(k) plans among eligible workers: 83% per Vanguard 2023.
- Only 35% of private sector workers had access to DC plans in 2022 per BLS.
- 401(k) participation rate for women: 81% vs 84% for men per Vanguard HAS 2023.
- Enrollment rate in automatic enrollment plans: 92% per Vanguard 2023.
- 68% of state and local government workers participate in DC plans per BLS 2023.
- Participation among Gen Z workers: 62% per Fidelity 2023.
- Only 48% of part-time workers participate in employer plans per EBRI 2023.
- Auto-enrollment boosts participation by 9 percentage points per Vanguard.
- 77% of eligible federal workers participate in TSP per 2023 report.
- Participation rate for Hispanic workers: 75% per Vanguard 2023.
- 15% of workers aged 25-34 opt out of auto-enrollment per Fidelity.
- Coverage rate for small firms (<100 employees): 39% per BLS 2022.
- 89% participation in plans with auto-escalation per Vanguard 2023.
- Black workers participation rate: 79% per Vanguard HAS 2023.
- 62% of gig workers have no retirement plan access per JPMorgan 2023.
- Participation among ages 55-64: 85% per Fidelity Q4 2023.
- Large firms (>5000 employees) coverage: 94% per BLS.
- Women under 30 participation: 78% per Vanguard.
- 71% of union workers covered vs 50% non-union per BLS 2023.
- Opt-out rate drops to 7% with auto-enrollment per EBRI.
- 65% participation for service industry workers per BLS.
- Fidelity reports 84% average participation rate across plans in 2023.
- 40% of self-employed have retirement plans per SCF 2022.
- Construction industry coverage: 45% per BLS 2023.
Participation Rates Interpretation
America's retirement system resembles a high-end buffet with a velvet rope: while the vast majority of those who are ushered inside (and nudged toward a plate) do in fact partake, a concerning number of workers are stuck outside reading the menu, never getting past the bouncer.
Savings Adequacy
- 44% of Americans say they are behind on retirement savings per Northwestern Mutual 2023.
- Only 53% of Americans are on track for retirement per Fidelity 2023.
- Required savings rate to be on track: 15% of income per Fidelity.
- 51% fear outliving savings per Allianz Retirement Index 2023.
- Average retiree needs $1.46 million for comfortable retirement per Northwestern Mutual.
- 78% of pre-retirees worry about healthcare costs eroding savings per EBRI.
- Savings gap for average American: $413,000 per T. Rowe Price 2023.
- Only 29% have a retirement savings plan per Gallup 2023.
- 57% of workers have less than $25,000 saved per 2023 Natixis survey.
- Retirement confidence index at 77% per EBRI/RIA 2023.
- 64% of Gen X not on track per Empower 2023.
- Average Social Security covers 40% of pre-retirement income per SSA.
- 49% have tried to calculate needed savings but 43% never have per EBRI.
- Projected shortfall: $4.5 trillion aggregate per ICI estimates.
- 35% of retirees report running out of money as top fear per AARP.
- Fidelity benchmark: 10x salary by retirement, average is 6x.
- 72% of Americans overestimate Social Security benefits per Nationwide.
- Adequacy ratio for bottom quintile: 45% of needs met per Urban Institute.
- 60% of households risk falling short per Center for Retirement Research.
- Median replacement rate goal: 77%, achieved by 40% per Vanguard.
- 25% of pre-retirees have no savings per Census 2023.
- Longevity risk: 50% chance of living to 90 per SSA.
- Healthcare costs projected at $315,000 for couple per Fidelity 2023.
- 42% dip into retirement savings early per Bankrate 2023.
- On-track savers contribute 15%+ from start per Fidelity.
- 67% of boomers undersave per Merrill Lynch 2023.
- Inflation erodes 21% of savings over 20 years per BLS.
- 80% need supplemental income beyond Social Security per SSA.
- Women face 30% larger savings gap due to longevity per Vanguard.
- Median worker needs $1.7M for 80% replacement rate per Aon.
- 55% of households with DC plans still at risk per EBRI.
Savings Adequacy Interpretation
America’s retirement plan appears to be an unsettling cocktail of optimism, denial, and a vague hope that avocado toast might somehow become a currency.
Savings Balances
- The average 401(k) or similar defined contribution plan balance at Vanguard at the end of 2023 was $134,128 for all participants.
- The median 401(k) balance at Vanguard in 2023 was $35,286 across all savers.
- Average balance for Vanguard participants aged 65+ reached $272,588 in 2023.
- Median retirement savings balance for U.S. households aged 55-64 was $185,000 according to the 2022 Survey of Consumer Finances.
- The average IRA balance at Fidelity Investments as of Q4 2023 was $129,200.
- Median 401(k)/403(b) balance for Fidelity clients aged 60+ was $232,710 in Q4 2023.
- Average retirement account balance for Schwab clients in 2023 was $112,400.
- 52% of Americans have less than $50,000 in retirement savings per Northwestern Mutual's 2023 Planning & Progress Study.
- Average 401(k) balance for consistent savers over 15 years at Fidelity is $443,000.
- Median net worth excluding home equity for retirees is $255,000 per 2022 SCF.
- Average balance in employer-sponsored plans grew 15.9% in 2023 per ICI.
- 401(k) participants aged 55-64 had average balances of $232,710 at Fidelity Q4 2023.
- Median retirement savings for Gen X (44-59) is $141,520 per Empower 2023.
- Total U.S. retirement assets reached $38.3 trillion in Q4 2023 per ICI.
- Average 403(b) balance at TIAA in 2023 was $178,000.
- Median savings for households headed by 65-74 year olds: $200,800 per SCF 2022.
- Average Roth IRA balance at Fidelity Q4 2023: $45,600.
- 401(k) balances for Vanguard participants with 10+ years tenure average $249,300.
- Average retirement savings shortfall for Americans is $279,000 per Allianz 2023.
- Median 401(k) balance for women at Vanguard: $28,500 in 2023.
- Average balance for Black 401(k) participants: $65,000 per Vanguard 2023.
- Total DC plan assets: $9.6 trillion in 2023 per ICI.
- Median IRA balance for ages 70+: $150,200 per Fidelity 2023.
- Average savings in 401(k)s for ages 45-54: $168,600 at Fidelity.
- Pension assets total $3.5 trillion per ICI Q4 2023.
- Median retirement account balance for millennials: $25,000 per Bank of America 2023.
- Average balance growth rate for 401(k)s: 13.5% in 2023 per Vanguard.
- 24% of Americans have over $1 million in retirement savings per Northwestern Mutual 2023.
- Median savings for ages 35-44: $60,763 per Empower 2023.
- Average annuity value in retirement portfolios: $145,000 per SCF 2022.
Savings Balances Interpretation
The jarring reality of American retirement savings is a tale of two nest eggs: while the average figures suggest a comfortably padded future, the median numbers reveal that for most people, the financial cushion is perilously thin.
Sources & References
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