New data shows that market volatility aside, 4 in 10 workers increased the percentage of their paycheck they set aside in their 401(k) account last year, compared with 9% of savers who slashed their contributions and 2% who stopped altogether.
In 2022, more than 8 in 10 Americans who were eligible for an employer’s voluntary 401 retirement plan were enrolled. Since 2013, this measure has increased by eight percentage points. And in spite of inflation, worries about a recession, and rising interest rates, they’re setting aside, on average, 7.4% of their income, a record high, up slightly from 7% in 2018, the report found.
He added that automatic enrollment and automatic increased contribution rates make it easier for "plan participants to bypass inertia, procrastination, and the perceived complex decision making that often discourages long-term saving."The analysis was pulled from Vanguard’s roughly 1,700 qualified plans, 1,400 clients, and nearly 5 million retirement plan participants. Here are some more highlights:.
Despite all the noise about women not being engaged with investing, in 2022, at all income levels, women were more likely than men to join their employer's retirement plan, according to the “How America Saves 2023” report, compiled by the investment management company Vanguard. Participation rates were lowest for employees younger than 25 , while a sizable 8 in 10 employees between ages 35 and 64 set funds aside in their 401s.
Meantime, and not surprisingly, the percentage of income invested in employer retirement accounts is directly related to pay, according to Vanguard.
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