Average employee defers $4,945 into 401(k) plans, falling short of the $24,500 IRS cap by $19,555.
The average worker contributes $4,945 annually to 401(k) plans, leaving $19,555 of the $24,500 IRS limit unused. This gap reflects a 7.7% average deferral rate on median earnings of $64,220.
The IRS raised the 401(k) cap to $24,500 in 2026, up from $23,500 in 2025 and $23,000 the prior year. Contribution rates vary by age, with Gen Z at 7.2% and Baby Boomers at 11.9%, yet both groups underutilize the limit.
Household spending reached $78,535, while real hourly earnings rose only $0.10 over 30 months, pushing the personal saving rate to 3.9%. The average 401(k) balance stands at $144,400, with a combined savings rate of 14.2%.