This Age Group Is The Most Likely To Max Out Their 401(k)—See How You Compare

Core Insights - The article highlights the increasing importance of maximizing 401(k) contributions for older workers approaching retirement, particularly those aged 55 to 64, who are the most likely to have maxed out their contributions in 2024 [1][7]. Group 1: 401(k) Contribution Trends - In 2024, nearly 19% of individuals aged 55 to 64 maxed out their 401(k) contributions, with the contribution limit set at $23,000 [2]. - Only 3% of workers younger than 25 contributed up to the 401(k) limit, indicating a significant disparity in retirement savings behavior between age groups [2]. Group 2: Retirement Preparedness - There is a growing retirement crisis in the U.S., exacerbated by rising costs, inadequate savings, and the potential depletion of the Social Security trust fund, necessitating increased savings for stable retirement income [3][4]. - Research from Vanguard indicates that older generations exhibit lower levels of retirement readiness compared to younger generations, which is measured by their ability to maintain a similar lifestyle in retirement [5]. Group 3: Factors Affecting Retirement Savings - Changes in the U.S. retirement system, such as improved access to defined contribution plans, have positioned younger workers to be better prepared for retirement than older workers [6]. - Strategies for older workers to improve their retirement readiness include increasing contributions to tax-advantaged accounts, delaying Social Security benefits, utilizing home equity, working longer, and reducing spending in retirement [7].