Record 401(k) Savings Rates Seen in 2024, Vanguard Finds

Updated June 27,⁢ 2025
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Americans are increasingly focused on retirement savings, according to Vanguard’s annual “How⁣ America ‍Saves” report. The ⁣study, which analyzes 401(k) and⁢ workplace retirement plan trends, reveals significant increases in⁤ key savings metrics.

A standout statistic shows the⁢ average 401(k) ⁣deferral rate reached a⁣ record ⁣high of 7.7% in 2024. This represents the percentage of⁤ an employee’s salary contributed to their 401(k) each month.

More individuals are actively boosting their savings. ‍Sixteen percent of participants increased their payroll deferral percentage, while onyl⁣ 8% decreased ⁢it. Moreover, 29% experienced a boost in their deferral rate through automatic ⁣increase features.

a record 45% of plan participants raised their savings⁤ rates in 2024. This figure marks an all-time high in the 24 years vanguard has conducted the survey. The data encompasses approximately 1,400 retirement plans with over 5 million participants.

Lauren Valente, managing director at Vanguard Workplace Solutions, noted the resilience of savers. “The report shows that,despite economic pressures and uncertainties,plan sponsors and participants continued⁢ to move forward in ⁤2024,” ⁣Valente said. She added that automatic solutions and professionally managed allocations⁣ played a key role in driving participation and optimizing investment strategies.

Employer Matching contributions and 401(k) Plans

The Vanguard report also examined employer ⁣matching contributions. Fifty percent of Vanguard plans offered only⁤ a matching contribution,‍ covering 52% of participants. An additional 36% of plans provided both matching and‍ nonmatching contributions, covering 44% ‍of participants. Ten percent offered only nonmatching contributions, serving 3% of participants. In total, 96% of plans, covering 99% of participants, included some⁢ form of employer match.

Among plans with an employer match, 68% used a single-tier match formula, while 25% offered multi-tier formulas.Six percent of plans imposed a maximum dollar cap on employer contributions.

The most common match formula, used by 13% of plans, was a 50% match on⁣ the first 6% of pay. Other popular formulas included a⁤ 100% match on the first 3% of pay‍ with 50% on the next 2% (10% of plans), and a 100% match on ‍the first 6% of pay (9% of plans).

The average employer match remained steady at 4.6% of pay, consistent with 2023. This figure has gradually increased from 4.2% in 2015.

Vanguard noted that nonmatching contributions typically take the form of variable or fixed profit-sharing⁤ contributions or employee stock ownership plan (ESOP) contributions.

Participation in 401(k) and workplace ⁤retirement plans remained stable⁤ at ⁤85%, ⁢unchanged from 2023 but ⁢up from 81% in 2015. Automatic enrollment, offered by 61% of plans in 2024, has contributed to increased participation.This is up from 59% in 2023 and 41% in 2015.

Investment Returns and Asset Allocation

The average account balance among those surveyed reached $148,153, a 10% increase from the previous year.

401(k) plan investors saw an average return of 12.7% in 2024. Over the past three and ⁤five ‍years, average annualized ‍returns were 5% and 8%, respectively.

Approximately 75% of ⁣overall assets ⁢were invested in equities, with 42% in target date funds, ‍41% in diversified equity funds, and 2% in company stock. Three percent of participants invested in balanced funds, 6% in bond funds, and 5%⁢ in cash.

While the average plan offered 27.6 ⁤investment options, 64% of participants used only one ⁣fund. The average participant used 2.3 funds. Of those investing