Vanguard Says 49% of Workers Miss 12%-15% Retirement Savings Target
Updated
Updated · AOL · Aug 20
Vanguard Says 49% of Workers Miss 12%-15% Retirement Savings Target
1 articles · Updated · AOL · Aug 20
Summary
49% of workers saved below Vanguard’s recommended 12% to 15% retirement rate in 2025, even after counting employer matches and profit-sharing contributions.
12.1% was the average total contribution rate once employer money was included, versus 7.6% from workers’ own paychecks alone, showing how personal deferrals can understate or mask savings gaps.
14% of participants hit the 2025 legal contribution maximum—$23,500, or $31,000 for those 50 and older—while 51% either met the target range or reached the cap.
45% of participants increased their savings rate in 2025, with automatic plan escalation driving most of that rise at 31% versus 14% who raised contributions on their own.
6% of eligible participants took hardship withdrawals in 2025, a record high, underscoring how inflation, higher rates and short-term cash strain are colliding with long-term retirement saving.
If automatic enrollment drives 94% participation, why are nearly half of American workers still falling dangerously short of their retirement goals?
With record numbers raiding their 401(k)s, is the traditional 15% retirement savings rule actually pushing Americans into immediate financial distress?
Can the IRS's new 2026 catch-up limits truly save older workers, or is it too late to close the retirement wealth gap?