The amount Americans hold in their 401(k)s based on different income levels

Retirement Savings Trends Among Americans

Many Americans, regardless of their age or income, often feel they’re not saving enough for retirement. Interestingly, those who earn higher salaries can save more, but it’s crucial—well, I think—to ensure that their contribution increases alongside their earnings. It’s not unexpected, then, that workers with higher incomes typically boast larger 401(k) balances, according to new data from Vanguard, an asset management firm.

For those making between $100,000 and $149,999, the median balance in employer-sponsored retirement plans, such as 401(k)s and 403(b)s, is significantly higher than that of workers earning between $50,000 and $74,999. Vanguard examined data from nearly 5 million participants across these plans.

Let’s break down the retirement savings based on income level. It’s worth noting that while the average balance may look impressive, the median balance tends to offer a more accurate picture. This is because a few high contributions can skew the average, so the median reflects a more typical scenario.

Also, remember that the figures shared here are specific to those savings within Vanguard’s defined contribution plans. Individuals might have savings in other plans or personal investment accounts that aren’t captured here.

Early Savings Habits Among Americans

Despite ongoing macroeconomic challenges—like persistent high prices and recession fears—many Americans are making long-term financial goals a priority, particularly when it comes to retirement savings. “There’s been consistent year-over-year improvement in how people save for retirement,” remarks David Stinnett, Vanguard’s head of strategic retirement consulting, in an email to CNBC. He emphasizes that workers are saving more regularly and investing wisely, no matter the economic climate.

One significant factor that seems to boost savings balances is automatic enrollment. Those who are automatically included in their company’s retirement plans have about 60% larger account balances compared to individuals who must opt in. The study shows that the median balance for those automatically enrolled for at least a decade was $192,372 in 2024, while those who voluntarily opted in averaged $121,094.

“It’s encouraging to see employers design 401(k) plans that facilitate retirement saving, and auto-enrollment plays a key role in this,” Stinnett added.