The latest numbers from Vanguard paint a mixed picture of America’s retirement future.

More workers are saving through 401(k) plans than ever before, but millions still lag far behind, especially in lower-income households.

And the gap is widening fast.

Encouraging Signs Amid Uneven Progress

Vanguard’s new Retirement Outlook shows a clear improvement in national retirement readiness. Participation in workplace plans is climbing, automatic enrollment is boosting savings, and average contribution rates have risen steadily over the past few years.

That’s the good news — more Americans are at least starting to prepare.

The challenge is that preparation isn’t evenly spread. High earners and workers with employer-matching programs are seeing strong gains, while lower-income Americans, part-time workers, and small-business employees are still struggling to save enough.

According to Vanguard, roughly 60% of eligible workers now participate in 401(k) plans, but the median balance across all accounts remains relatively modest. That means many nearing retirement still risk running out of savings too soon.

“The data show progress, but it’s not victory,” said one Vanguard economist. “Retirement readiness has improved, yet the divide between higher and lower earners remains stubbornly wide.”

And that divide could shape the next generation’s financial security.

A Tale of Two Retirements

Automatic enrollment has been one of the biggest drivers of improvement. Workers are saving earlier and contributing more. The average savings rate now tops 11% when including employer matches — a sign that awareness is growing.

Still, income differences make an enormous impact. Higher earners have access to financial advisors, better plans, and higher matches. Lower-income workers, meanwhile, often face job turnover, unpredictable hours, and competing expenses that make consistent saving nearly impossible.

Vanguard’s data highlight another concern: many retirees are still withdrawing too quickly. Rising costs and longer lifespans are forcing some to dip into savings faster than planned, putting long-term stability at risk.

Financial experts warn that while national averages look positive, averages can hide the real story. For every retiree well prepared for the future, there’s another still living check to check, relying on Social Security alone.

The findings are a reminder that small habits still make the biggest difference — steady contributions, longer investment horizons, and clear withdrawal strategies.

The progress is real. But the path to retirement security remains uneven, and unless policy and education catch up, America could end up with two retirements — one secure and one struggling.