How Your Retirement Contributions Stack Up Against Others Your Age—And Why It Matters

Core Insights - Contribution rates to workplace retirement plans are often set early in a career and may remain unchanged for years, significantly impacting long-term retirement readiness [2][4] - Most workers lack awareness of how their contribution rates compare to others, making it difficult to assess if they are on track for retirement [3][5] Contribution Rates by Age and Income - J.P. Morgan's 2025 report indicates that contribution rates increase with age: Gen Z averages 3.7%, Millennials 5.0%, Gen X 6.0%, and Baby Boomers just over 7%, all below the recommended 10% [6][9] - Higher earners contribute more, but even among top earners nearing retirement, average rates are under 9%, indicating a broader trend of insufficient contributions [8][11] Impact of Contribution Increases - A 1% increase in contribution rates can lead to significant long-term benefits; for example, a worker increasing from 5% to 8% in their mid-20s could accumulate about $84,000 more by retirement compared to someone who does not increase their rate [14][15] - Timing of contribution increases is crucial; a late increase yields much lower additional savings, highlighting the importance of early adjustments [15] Strategies for Improvement - Small, manageable increases in contribution rates are recommended, as they are easier to sustain and can have a meaningful long-term impact [16][19] - Automation of annual increases in contribution rates can help maintain consistent growth without requiring annual decision-making [17] - Ensuring full utilization of employer match programs can enhance total savings rates without significantly increasing personal contributions [18]