News release

Vanguard Releases 20th Edition of How America Saves

Automatic DC plan features vital to improving participants’ chances of retirement success

VALLEY FORGE, PA (June 11, 2021)—World-class plan design, including automatic enrollment, annual automatic deferral increases, and target-date funds helped defined contribution (DC) participants stay the course during the COVID-19 pandemic, according to the most-recent edition of How America Saves. Now in its twentieth year, Vanguard has continued to expand the catalog of How America Saves research with Insights to Action, a supplementary report delivering expert recommendations shown to improve plan efficacy and employee participation.

“The unwavering investment focus and discipline demonstrated by Vanguard 401(k) participants throughout the COVID-19 pandemic is a powerful illustration of the benefits and value of thoughtful plan design,” said John James, managing director and head of Vanguard Institutional Investor Group. “Together with Vanguard, plan sponsors continue to make incredible progress expanding access to the tools and resources employees need to improve their financial well-being.”  

Smart plan design encourages greater retirement savings
Adoption of DC plan features such as automatic enrollment, automatic escalation, and target-date funds helped more participants save for retirement and keep their focus on the long term, even in the wake of last year’s unprecedented market uncertainty. Specifically:

  • Participants’ increasing use of target-date funds—which offer a risk-adjusted, all-in-one portfolio solution—led to a 75% decrease in extreme equity allocations among participants over the last 15 years.
  • Target-date funds tamped down frequent trading—96% of participants holding a single target-date fund did not make a trade last year.
  • Automatic enrollment helped employees save 50% more for retirement than those at companies offering voluntary enrollment.
  • Annual automated deferral increases resulted in participants saving 20-30% more after three years than employees without automatic increases.

Driving better retirement outcomes
How America Saves has served as a benchmarking tool and blueprint for best practices in DC plan design for plan sponsors for two decades. Last year, drawing on the data from the flagship report, Vanguard Strategic Retirement Consulting (SRC) launched How America Saves: Insights to Action, a supplementary report offering effective plan design recommendations that can meaningfully improve participants’ outcomes.

This year’s Insights to Action encourages plan sponsors to focus on four key areas: automatic features, adoption of advice and retiree-friendly policies, and the curtailing of frequent loans and withdrawals. Combined, these plan design features can meaningfully improve participation and savings rates and keep participants on track for retirement.

“Retirement savings is just one piece of a participant’s broader financial picture, and they are increasingly looking to their employer plans for customized advice and solutions that take a more comprehensive approach to financial well-being,” said Mr. James. “Through both continuous investment and evolution of our capabilities, Vanguard has an advice suite designed to address each participant's unique circumstances. Combined with our reimagined client experience, world-class thought leadership, and top performing investments, Vanguard is well-positioned to meet plan sponsors’ and participants’ needs both now and for years to come.”

With more than $1.7 trillion in DC assets under management, Vanguard serves as recordkeeper and strategic partner to 1,400 plan sponsors—helping them build smarter, stronger DC plans for 4.7 million participants. Long recognized as an industry leader in DC plan design, Vanguard is focused on providing plan sponsors with leading advice and investment solutions and cutting-edge technology, research, and client experiences that help more participants save for retirement.

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About Vanguard

Vanguard is one of the world’s largest investment management companies. As of April 30, 2021, Vanguard managed $7.8 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 439 funds to its more than 30 million investors worldwide. For more information, visit

All figures as of April 30, 2021 unless stated otherwise.

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