Vanguard released the 23rd edition of its “How America Saves” report, which spotlighted the retirement-saving behaviors of nearly five million Vanguard participants.
Go deeper: The report found that employees are contributing record amounts into their 401(k)s: 7.4 percent of their earnings in 2023 — almost 12 percent if you include employer contributions.
- Vanguard attributed the increase to greater adoption of automatic enrollment plans of which 60 percent default employees at a four percent or higher deferral rate.
- In 2023, the average account balance for Vanguard participants was $134,128; the median balance was $35,286.
- Vanguard participants’ average account balances increased by 19 percent since year-end 2022, driven by an increase in equity and bond markets and ongoing contributions over the year.
- Hardship withdrawal activity increased as well, with 3.6 percent of participants initiating a hardship withdrawal, up from 2.8 percent in 2022. The main reason for hardship withdrawals was to avoid a home foreclosure.
