Here’s How Much Salary the Average American Contributes to Retirement Savings
Written by
Gabrielle Olya
Edited by
Chris Cluff
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Many financial experts recommend contributing 10% to 15% of your income to retirement savings, but the majority of Americans are not making the mark. A recent GOBankingRates survey revealed how much the average American is actually contributing — and it’s shockingly low.
Here’s a look at how much of their salary Americans contribute to retirement savings. And here’s how much they should have.
Many Americans Aren’t Saving for Retirement
Nearly 40% of Americans are contributing nothing to their retirement savings, the GOBankingRates survey revealed. Twenty percent of Americans, however, are contributing within the suggested income range, with 11% contributing 10%, 4% contributing 11-14%, and 5% contributing 15%.
If you’re currently contributing below 15% but do get a company match, you may be able to get away with contributing a smaller percentage of your salary.
“If you’re aiming for a 15% savings rate, your employer may already be contributing up to 5%, which means you only need to save 10%,” said Kris Carroll, CFA, CFP, managing director Carolinas at Wealth Enhancement Group.
“Saving 10% of your salary can sound like a lot, especially in the early years when your salary may be lower, or during the child-rearing years when it seems like you’ll never have enough,” he continued. “One way to achieve this is to start saving early and gradually increase your savings rate over time.”
More Is Always Better
Chris Urban, CFP and founder of Discovery Wealth Planning, recommends saving between 10% and 30% of your salary.
“Of course, everyone’s lifestyle, living expenses and family situation are different,” he said, “so it’s important to keep that in mind as you consider which end of the range you are on.”
If you’re far from that 30% mark, however, you are not alone — just 6% of Americans are contributing 20% or more of their salary to retirement savings, the survey found.
Something Is Better Than Nothing
Even if you can’t contribute 10% right now, contributing something is better than contributing nothing.
“If your employer offers a matching contribution to their retirement plan, you absolutely should be contributing at least the maximum amount that they will match,” Urban said. “This is free money. If you are able to make additional contributions on top of this amount, you should absolutely do it.”
If you can’t, this is something to work up toward over time.
“I would focus on increasing your contribution amount as your income increases,” Urban said. “It’s important to remember the power of compounding. Contributing smaller amounts earlier in your career may be a bigger contributing factor than larger amounts later in your career, and this is because of the effects of compounding returns.”
Survey methodology: GOBankingRates surveyed 1,005 Americans ages 18 and older from across the country between Jan. 23 and Jan. 26, 2024, asking six questions: (1) What is more important to you in a job/career?; (2) What is the minimum annual salary that would make you feel happy?; (3) How much do you believe you will need in savings to retire comfortably?; (4) How much do you currently have saved for retirement?; (5) Do you think you will be able and prepared to retire at 65?; and (6) What percentage of your salary do you put toward a retirement plan, such as a 401(k)? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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