Millennial 401(k) Savings Rates

While millennial savings rates aren’t hitting the industry target of 15 percent annually into their 401(k) accounts, most millennials are probably doing better than many advisors might expect.

Chief Data Officer Qian Liu of the California-based 401(k) startup has come out with some interesting data points on its millennial customers regarding their savings habits.

Financial advisors will probably not find much comfort in the numbers.

The company studied the saving behavior of 5,400 millennials who participated in employer-sponsored Guideline 401(k) plans, from July 2017 through August 2018. As they noted in their own write-up of the findings, the study used two key metrics to measure saving behavior: saving rate, defined as the fraction of a participant’s gross pay deferred in the plan and participation rate, defined as the fraction of eligible employees who participate in the plans.

Guideline found that their millennial clients on average were saving 8.3 percent annually into their 401(k) accounts, which compared favorably to the national overall 401(k) average savings rate findings of Deloitte (6 percent) and Vanguard (7.1 percent), respectively. According to Guideline, Vanguard found the average 401(k) savings rate for those aged 25 to 34 was even lower at 5.9 percent.

Guideline, Inc.

When Guideline parsed their own millennials they found that younger millennials were saving less on average than older millennials (7.7 versus 10.9 percent), which would seem intuitive given the latter are likely making more as they’ve been working longer (that supposition went beyond what Guideline reported). One more interesting tidbit was that the company found its Gen X participants were saving on average 10.1 percent. However, no one seems to be reaching the typically cited industry suggested 15 percent, hence the thought that advisors might be less than happy about their future average prospects.

Guidelines defines millennial as corresponding to the population born between 1981 and 1996; Gen X is defined as the population born between 1960 and 1980, which follows the methodology of the Pew Research Center. The national millennial saving rate was provided by Deloitte; Vanguard and the industry classification system was provided by NAICS Association.

As always, if you want to discuss your personal savings rate, or any other financial planning issue, please give The Gardner Group a call at (214) 706-4369.


This article first appeared on’s September 7, 2018 edition, by Davis Janowski.

%d bloggers like this: