Working Boomers Save 12.1% of Pay in 401(k), Ahead of Every Other Generation, Though Few Increased Their Rate Last Quarter

Working Boomers put a larger share of their pay into 401(k) plans than any younger generation, even though most did not boost that rate in the most recent quarter. A modest increase before retirement could reduce taxes now and add to their nest egg later.

Many Baby Boomers who are still employed have been contributing to retirement plans for decades. Some set their savings rate long ago and may assume there is little reason to change it this late in their careers. Here is a look at how much they are saving, how often they recently increased their rate, and what even a small adjustment can still do in the years before retirement.

Boomers Top the List for Savings Rate

Fidelity’s latest 401(k) data shows that Boomers have an employee savings rate of 12.1%. That compares with 10.4% for Gen X, 8.9% for Millennials, and 7.5% for Gen Z. The employee savings rate refers to the portion of each paycheck a worker contributes to the plan, excluding any employer contributions.

The pattern tracks closely with age. Older workers generally earn more, their children are often grown, and retirement is nearing. Younger workers, by contrast, are more likely to be balancing rent, student loans, and childcare, which can keep contribution rates lower.

Fewer Boomers Increased Their Contributions

The same Fidelity figures show that just 9.6% of Boomers raised their contribution rate in the latest quarter, below the 11.2% rate across all workers. In other words, the generation saving the most was slightly less likely to increase its savings further.

One possible reason is the sense that there is less time left for contributions to compound. Money added at age 60 has fewer years to grow than money invested at age 30. Even so, final-year contributions still matter. Pretax contributions reduce taxable income in the year they are made, and every additional dollar adds to the pool available in retirement.

Catch-Up Contributions Can Be Substantial

For 2026, the regular employee contribution limit is $24,500. Workers age 50 and older may add up to $8,000 in catch-up contributions, bringing the total to $32,500. These extra contributions are permitted under 26 U.S.C. § 414(v), the section of the tax code covering catch-up amounts.

Workers ages 60 through 63 can make an even larger super catch-up contribution of up to $11,250, lifting the total to $35,750. Once a worker turns 64, the limit returns to the standard catch-up amount.

Higher earners face a newer requirement as well. Beginning in 2026, workers whose 2025 compensation from the employer sponsoring the plan exceeded $150,000 generally must make catch-up contributions on a Roth basis. Roth contributions are made after tax, so there is no upfront deduction, but qualified withdrawals in retirement can be tax-free. The rule stems from the SECURE 2.0 law enacted in 2022.

How a Small Increase Can Grow Over Time

Consider a single filer earning $80,000 who has seven years left before retirement and increases the savings rate by 3 percentage points. That would mean an extra $2,400 per year going into the 401(k). If those additional contributions earn an assumed 6% annually, they could grow to about $20,145 by retirement, on top of whatever the account would have contained otherwise.

Taxes help reduce the immediate cost. After the $16,100 standard deduction, that worker would be in the 22% federal bracket for 2026. Putting the extra money in pretax would lower federal income tax by roughly $528, making the cut in take-home pay smaller than the full contribution amount.

Other Retirement Moves to Review

Vanguard’s 2025 How America Saves report found that workers needed to contribute an average of 6.5% of pay to receive the full employer match. The average employer match was 4.6% of pay. Anyone contributing below the match threshold is leaving part of that free money behind.

Workers covered by a high-deductible health plan may also be able to use a health savings account. The IRS limit for 2026 is $4,400 for self-only coverage and $8,750 for family coverage, with an additional $1,000 allowed for people age 55 and older. HSA contributions must stop beginning with the first month a person is enrolled in Medicare, so for many people this option ends around age 65.

Another major decision is when to claim Social Security. Retired workers receive an average of $2,071 per month after the 2026 cost-of-living increase, and the maximum benefit at full retirement age is $4,152. Those who remain below full retirement age for the entire year can have some benefits withheld if they earn more than $24,480. A higher limit of $65,160 applies during the year they reach full retirement age.

An Open Enrollment Reminder

Open enrollment is often a good time to review benefits, and the 401(k) contribution percentage is only one of the figures workers can adjust. Boomers already save a larger share of pay than any other generation, but fewer of them increased their rate in the latest quarter. Even with only a few working years left, raising that percentage by a few points can still lower this year’s tax bill and leave more money invested for retirement.