The latest analysis from the Federal Reserve (also known as the US Federal Reserve) has found that in recent years, more Americans have been participating in retirement plans, and their savings are increasing.
The Federal Reserve’s Survey of Consumer Finances released a report on Friday titled “Changes in U.S. Family Finances from 2022 to 2025”, showing that by 2025, the percentage of households participating in retirement plans (with at least one person having a retirement account) has increased to 54.9%, up by 0.6 percentage points from 2022.
From 2022 to 2025, the median value of retirement accounts (calculating only households with accounts) grew by 11% to $106,000, and by 2025, the conditional mean or average value increased by 23% to $451,100.
Retirement accounts – including individual retirement accounts (IRA), 401(k), 403(b), traditional pension plans, and more – remain the second most common type of financial asset held by American households, second only to transaction accounts.
The Federal Reserve’s Survey of Consumer Finances shows that from 2022 to 2025, retirement savings balances have increased across almost all age groups.
The average balance for the 55-64 age group increased from $588,500 in 2022 to $670,200 in 2025, while the 45-54 age group saw their retirement savings rise from $342,700 to $415,800 during the same period.
For the 35-44 age group, the average retirement savings balance increased from $154,800 to $182,400. Although the average savings for the under 35 age group decreased from $53,800 in 2022 to $48,400 in 2025, it still remains higher than $43,800 in 2016 and $38,300 in 2019.
The analysis by the Federal Reserve indicates that Defined Contribution Plans (DC plans) and IRA plans are more prevalent than Defined Benefit (DB plans), with the youngest households having an insured rate of about 50% by 2025, compared to around 65% for the oldest households.
Defined Benefit plans are traditional pension plans where employers commit in advance to providing employees with a fixed amount or a retirement benefit based on a fixed formula, regardless of the performance of the investment market. In the US, many large corporations, government agencies, and unions used to offer these plans (traditional pension plans), but due to high costs and all risks being borne by employers, new plans of this type are now rare.
Defined Contribution plans are currently the most common type of retirement plan in the US, where employers and/or employees regularly contribute a fixed amount (or a fixed percentage) to individual retirement accounts, and the amount received upon retirement depends on the investment performance of the account. Common examples include 401(k), 403(b), Thrift Savings Plan (TSP) for federal employees, and IRA plans.
The study found that while households in all age groups have made some progress in Defined Contribution and IRA plans over the past decade, the largest increase is among the youngest age group, with their participation rate rising from 42% in 2016 to nearly 50% in 2025.
Almost all households own at least one type of financial asset, and by 2025, 98.9% of households have at least one transaction account, savings bonds, stocks, retirement accounts, cash value life insurance, or other managed assets.
Comparing to 2022, there was little change in these numbers, with transaction accounts being the most common financial asset category in 2025 at 98.7%, including checking accounts, savings accounts, money market accounts, and prepaid debit cards.
From 2022 to 2025, the percentage of households directly holding stocks decreased from 21% to 19%. In 2019, the Federal Reserve’s Survey of Consumer Finances showed a 6-percentage point increase in households directly holding stocks compared to 2022, marking the largest change in the history of the survey.
The latest research results indicate that although the percentage dropped from 2025 compared to 2022, it is still much higher than the 15.2% in 2019. The conditional median stock holdings also bounced back from $16,400 to $30,000, almost completely offsetting the decline from 2019 to 2022.
All the mentioned dollar amounts are adjusted for inflation in 2025.
(Reference: Fox Business)