Are You Contributing as Much of Your Income as Your Peers?

If you’re in your 20s and saving for retirement, you’re already ahead of almost half your peers. A Federal Reserve survey found that just 57% of Americans under 30 have any retirement savings at all.

But among middle-class 20-somethings who are socking money away for retirement, the picture looks more encouraging: 77% are contributing to a 401(k) or similar plan, and the median amount saved is $43,000 per household, according to a Transamerica Center for Retirement Studies survey released last week.

Meanwhile, Fidelity data shows that those who do contribute are not that far from the 15% many financial experts recommend. Still, as Jim Triggs, CEO of Money Management International, told Investopedia, “Many 20-somethings erroneously believe retirement is so far away that they’ll get to it later.”

A Savings Snapshot of Young Americans

Fidelity’s data show that Gen Z workers are deferring about 7% to 9% of their pay into 401(k)s, while employers typically add another 3% to 5% in matching contributions. That brings the total savings rate for most young workers to around 11% to 13% of income, depending on age and plan design.

Yet even those modest contributions can feel like a stretch for many young Americans. According to Northwestern Mutual’s annual survey, almost half (46%) of Gen Z adults (those born between 1997 and 2012) worry they won’t be able to afford a home, and about three in 10 say having children is financially out of reach.

Still, small, steady contributions are adding up. Transamerica’s 2025 survey found that middle-class 20-somethings who are saving have built a median of $43,000 across household retirement accounts. Even as young adults have to postpone their life goals, many are building a foundation for later in life.

One thing younger Americans are doing earlier? Saving for retirement: the median age for middle-class Americans in their 20s who started saving is age 21, compared with ages 27 and 30 for those in their 30s and 40s, respectively.

Why Early Savings Matter

Even modest contributions in your 20s—say, $50 to $100 a month plus an employer match—can snowball into tens of thousands of dollars over the decades. Waiting even five or 10 years to begin means you’ll need to save much more each month to catch up.

“You don’t have to start big, but you do have to start,” Triggs said.

When you’re young, consistency beats perfection. The real power isn’t in saving the “right” amount—it’s in forming a habit that will quietly build your financial security over time.

How To Get Ahead of the Curve

Triggs suggests you “automate a small contribution and treat it like a bill.” When you’re young, even a 1% to 2% boost in your savings rate compounds over decades. So, as you get income increases, consider channeling at least part of those raises (say 1% more per year) into retirement.

It shouldn’t feel like too big a bite out of your take-home pay, but by the time you’re ready to retire, it could have made a huge difference.

Also, if your employer offers a 401(k) match, contribute enough to get the full match. That’s free money.