Recent findings point to ongoing gains with peak participation levels, higher savings amounts, and rising account balances.

/PRNewswire/ -- How America Saves, Vanguard's yearly review of retirement patterns among nearly five million U.S. workers, shows that retirement savers stand in a stronger spot than before, marking over 25 years of advances in 401(k) plan structures and saver actions.

Across time the defined contribution setup has moved steadily from depending on personal steps to one shaped by plan features. This shift has lifted participation in retirement plans to a record 86 percent among those eligible, improved portfolio spread notably, and kept participants steady with just 5 percent trading even amid market swings, pointing to better long-term results.

"More than 25 years of data and insights make it clear that solid default contribution choices and automatic tools have opened up saving for retirement and made it more effective for more Americans than at any prior point," said Lauren Valente, Managing Director, Workplace Solutions. "We are proud to note the headway the industry has achieved as better plan features help more people save, remain invested, and create firmer financial paths ahead."

25 years of progress: A system reshaped by plan features

Over 25 editions of How America Saves, key long-term patterns have shown how 401(k) plan design changes have lifted participant results across the past quarter century, such as:

Automatic tools broaden access. Participation rose from 65 percent to 86 percent, driven by broad use of automatic enrollment and its part in drawing more workers into the system.
Higher defaults boost savings levels. Nearly two-thirds of plans now set automatic enrollment defaults at 4 percent or more, with about one-third at 6 percent, both record marks.
Professional oversight becomes standard. Nearly 70 percent of participants now rely on professionally managed allocations, aiding better diversified portfolios.
Employer aid lifts participant results. Matching contributions have grown over time to a record 4.7 percent, supporting participant savings and long-term buildup.

Building on gains: Ongoing headway in 2025

Alongside longer-term patterns, 2025 figures show participants continuing to advance on decades of steady gains and supporting firmer retirement results:

Savings habits keep improving. Forty-five percent of participants raised their savings rate in 2025, leading to an average savings rate of 12.1 percent, an all-time high.
Balances keep climbing. Account balances grew 13 percent from the prior year, reflecting both better savings habits and steady market involvement over time.
Participants remain steady. Only 5 percent of participants traded during market swings, showing sustained long-term focus.

Looking forward: Fortifying the system ahead

Despite clear gains, the report notes ongoing money pressures facing American workers, especially when balancing short-term needs with long-term savings aims. Higher hardship withdrawals signal continued shortfalls in financial strength and the call for tools that better aid participants through sudden costs.

"While the gains and participant results are notable, they also show the path forward," said Valente. "Strengthening the system further means aiding Americans in handling short-term money strains while keeping on track for long-term retirement security and broadening tools that support them at every phase of their path."

How America Saves is Vanguard's yearly review of participant actions and plan design trends in defined contribution plans, offering a full picture of how Americans save and invest for retirement.

About Vanguard

Founded in 1975, Vanguard is one of the world's leading investment management companies. The firm provides investments, guidance, and retirement services to tens of millions of individual investors worldwide, directly, via workplace plans, and through financial intermediaries. Vanguard follows a unique investor-owned setup where Vanguard fund shareholders own the funds, which in turn own Vanguard. As such, Vanguard follows a simple aim: To stand for all investors, to treat them fairly, and to offer them the best chance for investment success. For more information, visit vanguard.com.

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SOURCE Vanguard