Half of Americans Are Falling Short of the 15% Retirement Savings Target

"Vanguard's 2025 How America Saves report puts the 'Gold Standard' total savings rate at 12% to 15%, with the higher end specifically aimed at workers earning more than $100,000."

"The average total contribution rate, combining employee and employer dollars, is 12.0%, with a median of 11.5%. Because the average sits right at the bottom of the recommended zone, 50% of participants met or exceeded the 12% to 15% target."

"Vanguard's income-tiered guidance recommends 9% for earners under $50,000, 12% for those earning $50,000 to $100,000, and 15% for those earning over $100,000 due to the lower Social Security replacement rate for high earners."

"Hardship withdrawals hit 4.8% of participants in 2024, up from 3.6% in 2023, with 35% of those going to avoid foreclosure or eviction, indicating financial strain among savers."

Vanguard's 2025 report indicates that high earners need to save at least 15% of their income for retirement, yet many do not meet this target. The average total contribution rate is 12.0%, with a median of 11.5%, indicating that half of savers are below the recommended range. The report highlights the importance of personal savings for high earners due to lower Social Security replacement rates. Additionally, rising hardship withdrawals and outstanding loans among participants suggest that long-term contribution rates are at risk.

Read at 24/7 Wall St.