The Typical 401(k) Contribution Rate From Workers vs. The Recommended Rate
Written by
G. Brian Davis
Edited by
Zuri Anderson
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The more you save for retirement — especially while you’re younger — the faster you’ll become “work optional” and the more comfortable your retirement will be.
Of course, some workers save more aggressively than others. How does your 401(k) contribution rate stack up against the average American’s?
The Typical 401(k) Contribution Rate
According to a third quarter 2025 report by Fidelity, the average employee contributes 9.5% of their salary toward their 401(k) account. Employers add an extra 4.7% matching contribution on average, for a combined contribution rate of 14.2%.
That’s near a record high percentage of 14.3%, seen in the first quarter of 2025. But is it enough?
Rate Recommended by Financial Advisors
“Workers should aim to save approximately 15% of their income to their 401(k) to achieve a secure retirement,” recommends Rick Reed, retirement account expert with HR firm Segal. That falls in line with Fidelity’s own recommendation of 15%.
Bear in mind that that recommended rate of 15% includes both the worker’s and the employer’s contributions. So, the average American isn’t far off the recommended rate, by contributing 14.2%.
Granted, the Fidelity study only includes workers who have access to a 401(k) workplace plan. It therefore skews toward higher earners, rather than hourly or contract workers without access to a workplace retirement plan.
Don’t get discouraged if you can’t contribute anywhere close to 15% to your 401(k) account. Start by saving just the amount needed to secure the full matching contribution from your employer. It’s part of your compensation package after all!
Even small amounts compound over time, notes financial advisor Linda R. Jensen of Heart Financial Group.
“Time in the market and consistency matter more than finding the perfect moment,” Jensen said.
Beyond the Rate: What Else To Consider
Many employers nowadays offer a Roth option for 401(k) accounts. That means no tax break today, but you’ll pay no taxes on withdrawals, which means you won’t need as much saved for retirement. It also protects from tax rates rising in the future.
Often you can schedule auto-escalation for your contribution rate. That keeps the changes barely noticeable in your paycheck, but they add up to real money in your 401(k) fund over time.
Finally, Jensen urges her clients to think of their 401(k) plan as part of the broader context of accounts.
“Your 401(k) works best alongside other retirement accounts such as IRAs and HSAs if available, an emergency fund (so you’re not raiding your 401(k) for surprises), and a plan for how this money will eventually turn into stable, tax-efficient income,” she added.
Regular taxable brokerage accounts also offer flexibility for withdrawing money before you turn 59½.
Start simple, start small if you must — but get started nonetheless, to get in the habit of saving what you can for your golden years.
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