Key Takeaways
\nBenchmarking your contribution rate against others your age can help you see whether your current savings habits are on track.A new report shows Gen Z workers contribute about 3.7% of their salary to workplace plans on average, while Millennials contribute 5.0%, Gen X 6.0%, and Boomers just over 7%. All are below the recommended contribution rate of 10% or more.A 1% annual bump to your contribution rate can substantially improve long-term outcomes, especially when done early in your career.<\/p>\n
Why Retirement Contribution Rates Matter More Than Most People Realize <\/p>\n
Most workers have only a rough sense of whether they\u2019re contributing \u201cenough\u201d to their workplace retirement plan<\/a>. Contribution rates are often set early in a career, when your budget is tight, and may stay unchanged for years. Yet these seemingly modest choices\u2014setting a rate of 5%, 6%, or 7%\u2014hold far more influence over long-term retirement readiness than many people realize.\n<\/p>\n Defined contribution plans, including 401(k)s<\/a>, 403(b)s, 457 plans, and other employer retirement accounts, remain the primary way many Americans save for retirement<\/a>. But most workers have little insight into how their own contribution rate stacks up.\n<\/p>\n Plan dashboards highlight balances, not behavior, and people rarely discuss their contribution choices with colleagues or friends. That lack of visibility makes it tough to assess whether you\u2019re on track\u2014and many workers don\u2019t realize how much even a modest contribution change can add up to over time.\n<\/p>\n Why This Matters to You<\/p>\n Understanding how your contribution rate compares with others your age can make it easier to gauge whether you\u2019re on track for your long-term goals. Even if you find only a little room to improve at a time, small, sustained increases can really strengthen your retirement readiness.<\/p>\n What the Data Reveal About How People Contribute at Every Age and Income Level <\/p>\n The 2025 installment of J.P. Morgan\u2019s annual \u201cRetirement by the Numbers\u201d report shows that contribution habits vary widely across age and income groups, with contribution rates rising steadily with age. Among middle earners\u2014the group that roughly captures the median<\/a> for each generation\u2014Gen Z workers contribute about 3.7% on average, Millennials 5.0%, Gen X about 6.0%, and Baby Boomers a bit over 7%.\n<\/p>\n Income adds another layer to the picture. Within every generation, higher earners contribute more\u2014but not by much. The lowest-earning third of workers contribute 4% to 6.5% on average, with middle earners generally showing slightly higher rates.\n<\/p>\n Top earners unsurprisingly contribute the most, yet even among those nearing retirement<\/a>, average rates are under 9%. So while income influences contribution habits, it doesn\u2019t overcome the broader pattern: Most workers contribute less than the commonly recommended 10% or more of pretax income.<\/p>\n How to read this chart<\/p>\n Use the \u201cmiddle earner\u201d row if your annual income falls between the following:<\/p>\n Gen Z: about $28,000\u2013$45,000Millennials: about $43,000\u2013$71,000Gen X: about $47,000\u2013$80,000Baby Boomers: about $40,000\u2013$70,000<\/p>\n Income ranges based on J.P. Morgan\u2019s analysis of participant data.<\/p>\n For many employees, an employer match<\/a> program can help, but only to a point. J.P. Morgan\u2019s analysis finds that the average match adds about 3.2% of pay\u2014enough to lift total saving rates but not enough to take most workers to recommended targets.\n<\/p>\n Fidelity, for example, suggests aiming for a combined saving rate of about 15% of income, including employer contributions. But even with match dollars added in, the chart below shows how many employees still fall short of the 15% target.\n<\/p>\n Fast Fact<\/p>\n Only 15% of participants in J.P. Morgan\u2019s research reach the commonly recommended 10% contribution rate\u2014and even among high earners, just 22% save at a double-digit rate.<\/p>\n Why Small Increases Now Can Make a Big Difference Later <\/p>\n One of the most striking findings from \u201cRetirement by the Numbers\u201d is how much impact even a slight increase to your contribution rate can make. In J.P. Morgan\u2019s models, a worker who raises contributions by just 1% in their mid-20s\u2014starting at a 5% rate and bumping up to 8% over three years\u2014could accumulate about $84,000 more by retirement than someone who never increases their rate. The bigger balance stems from the long runway for compounding<\/a>\u2014small amounts added earlier have decades to grow.\n<\/p>\n The timing also matters. That same 1% bump made later in a career still helps, but not nearly as much. J.P. Morgan\u2019s projections show that if you wait until your last 20 years of work to move from 5% to 8%, the additional amount in your final balance is estimated to be only about $22,000. The gap between $22,000 and $84,000 underscores why contribution decisions that feel minor in the moment can meaningfully shift long-term outcomes\u2014and why even a small step upward can improve your retirement<\/a> picture.\n<\/p>\n What To Do If You’re Contributing Less Than the Benchmarks <\/p>\n Falling below the average contribution rate for your age or income group doesn\u2019t mean you\u2019re off track\u2014it simply offers a reference point for deciding what to do next. For many workers, the best approach is to start with a small, manageable increase. Raising contributions by even one percentage point is often easier to sustain than a larger jump, and the long-term impact can be meaningful.\n<\/p>\n Automation can also help. Many workplace plans allow you to schedule annual increases to your contribution rate, often in 1% steps. That structure removes the need to revisit the decision each year and helps keep contributions rising gradually as income grows.\n<\/p>\n It\u2019s also worth checking whether you\u2019re capturing your full employer match<\/a>, if your plan offers one. Ensuring that you don\u2019t leave match dollars on the table can quickly boost your total savings rate without increasing your own out-of-pocket costs as much as you might expect.\n<\/p>\n