Are You Among the Age Groups Most Likely to Fully Fund a 401(k)? See How Your Savings Measure Up

Main Insights

• Recent findings show that older employees are the most likely group to contribute the maximum amount to their 401(k) plans.
• Individuals who feel they are lagging in retirement savings can improve their situation by increasing their contributions, postponing Social Security benefits, or extending their working years.

If you’re nearing retirement and feel your savings are insufficient, now could be an ideal moment to boost your 401(k) contributions.

Data from Vanguard, based on roughly one million retirement plan participants, reveals that people aged 55 to 64 were the most likely to reach the 401(k) contribution limit in 2024.

Within this age bracket, about 19% managed to contribute the full $23,000 allowed for 401(k)s in 2024. In contrast, only 3% of workers under 25 reached this maximum contribution.

This trend is expected, as older employees are more inclined to maximize their retirement savings compared to younger workers, who generally earn less and have more time to save for the future.

Torsten Slok, Chief Economist at Apollo, noted that rising living expenses, insufficient savings, and concerns about the future of Social Security highlight a looming retirement crisis in the United States. These challenges mean many households need to increase their savings to secure a stable income during retirement.

Older adults, in particular, face a heightened risk of not having enough set aside for their post-work years.

Additional research from Vanguard indicates that older generations are generally less prepared for retirement than younger ones. Retirement readiness is defined as the ability to maintain a comparable lifestyle after leaving the workforce.

This gap isn’t necessarily due to an inability to save. Improvements in the U.S. retirement system—such as broader access to defined contribution plans like 401(k)s and enhanced plan features—have helped younger workers better prepare for retirement compared to previous generations.

Still, older workers have options to strengthen their financial outlook for retirement. Strategies include increasing contributions to tax-advantaged retirement accounts, delaying Social Security, using home equity, working additional years, and reducing expenses during retirement.