Here’s Last Year’s Average 401(k) Contribution
From Yahoo Finance: 2025-03-29 09:30:00
Many people are utilizing their workplace’s retirement savings plan, contributing an average of $8,800 from their 2024 salaries into 401(k) accounts. Employers also chipped in an average of $4,770, resulting in a total yearly funding of $13,570 per employee, according to Fidelity. Matching contributions can vary from 50% to 100% of the employee’s contribution, up to a limit of 3% to 6% of the worker’s salary.
Fidelity’s analysis reveals that the average match in 2024 was 4.7% of employees’ pay, with Baby Boomers and Generation X workers slightly outperforming this average. While employee salary deferrals are always the worker’s money, companies may apply a vesting schedule to matching contributions, allowing a growing portion to become fully vested over time.
The maximum contribution to a traditional or Roth IRA this year is $7,000 or $8,000 for those aged 50 and over. In contrast, the limit for 401(k) salary deferrals is $23,500 or $31,000 for older employees, with employers able to contribute up to a combined limit of $70,000. Mutual funds in 401(k) plans offer a straightforward investment option with potentially higher returns than individual stock picking.
For those planning to stay with their current employer, maximizing contributions to a 401(k) plan is advisable, as it often includes employer matching contributions and higher contribution limits than IRAs. Even with different fund choices in 401(k) plans, any amount of contribution is better than nothing.
If you are looking to boost your retirement income, learning about little-known “Social Security secrets” could potentially increase your benefits by thousands annually. Taking advantage of these strategies could help secure your financial future.