Perspectives : DC Retirement | October 13, 2023

A glimpse at retirement readiness in the U.S.

About half of all Americans have access to a workplace retirement plan, and those who do may be well on their way to securing sufficient retirement savings. But not everyone has access to a plan.
Source: U.S. Bureau of Labor Statistics, 2021.
Key interventions can better prepare workers for a secure retirement. We are seeing great progress in plans adopting such features. 

1 Participants with professionally managed allocations have their entire account balance invested in a single target-date or balanced fund or in a managed account advisory service.

Source: Vanguard, How America Saves 2023.

However, some who have access to a plan may not be taking full advantage.
Source: Vanguard, Automatic Enrollment: The Power of the Default, 2021.
When retirement readiness is assessed at the national level, the outlook is mixed. High-income workers―those in the top 5% of the income distribution―can readily finance their retirement. But low-, middle-, and upper-income workers who have annual earnings in the 25th, 50th, and 70th percentiles of the national income distribution may be unable to meet the spending levels typical of today’s retiree. Lower- and middle-income workers struggle to achieve readiness and upper-middle-income workers, on average, fall just short of a sustainable retirement.
Like other age cohorts, high-income families are the only income group among millennials with a sustainable replacement rate that more than meets their spending needs.

Notes: Lower-income millennial workers are those in the 25th percentile of the income distribution (median income of roughly $22,000). Upper-middle-income millennials are those in the 70th percentile of the income distribution (median income of roughly $61,000). Higher-income millennial workers are those in the 95th percentile of income (median income of roughly $173,000). The sustainable replacement rate is the percentage of pre-retirement income that a worker can replace throughout retirement in 90% of market and mortality scenarios.

Source: The Vanguard Retirement Outlook: A National Perspective on Retirement Readiness.

But the overall outlook is a bit brighter for younger generations in most income groups. 
Source: The Vanguard Retirement Outlook: A National Perspective on Retirement Readiness.


  • All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
  • Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the work force. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a target-date fund is not guaranteed at any time, including on or after the target date.