Each generation of Americans has fallen behind in their retirement planning as the rising cost of living competes for funds that could be used for long-term savings.
Only 58% of retirement savers say they will be on track or ahead of schedule in 2026, down from 68% a year ago, according to Goldman Sachs Asset Management’s latest Retirement Survey and Insights report. The share of Americans increasing their retirement savings also dropped sharply from 55% to 39%, while 14% said they had reduced the amount they were saving.
The results come as the rising cost of daily necessities continues to put pressure on the budgets of Americans across the country, having a knock-on effect on how much money they save for later in life.
“Our survey showed the largest single-year decline in six years in the share of people increasing their retirement savings, which may highlight a shift in momentum,” said Chris Seidel, senior retirement strategist at Goldman Sachs Asset Management.
“Savers are taking less action, and the actions they are taking are more defensive in nature, suggesting they may be concerned about continued inflation and market volatility.”
Every generation surveyed saw this deterioration. Among Gen Z respondents, the share saying their retirement savings are on track or better has dropped from 75% in 2025 to 66% this year. The decline among Millennials was even steeper, from 74% to 61%.
The next generation to retire, Gen Among baby boomers, the share dropped from 69% to 60%.
Rising costs impact retirement savings
The study, which surveyed 5,106 Americans in July, found that direct household spending is increasingly competing with retirement savings.
Thirty-one percent of employees believe housing costs and daily living expenses are barriers to saving for later life, while 27% say debt payments hinder their ability to save money.
Stress varies by age: 37% of Gen Z and 36% of Millennials cite housing as their biggest financial obstacle, compared with 21% of Baby Boomers.
Older workers are more likely to highlight expensive overhead expenses. About 37% of Generation X respondents and 33% of Baby Boomers said increased daily costs were their biggest obstacle.
Healthcare costs are also an important issue across generations, cited by 25% of Millennials, 23% of Gen Z, 23% of Baby Boomers and 20% of Gen X.
cost of living
It’s no secret that rising prices for daily necessities are eating into the wallets of ordinary Americans.
According to the U.S. Bureau of Labor Statistics (BLS), consumer prices rose 3.4% in August compared with the same period last year, and prices rose 0.4% between July and August alone.
Food prices rose 2.7% from a year earlier, while housing costs rose 3%. Another regular household expense, eating out, grew 3.4% over the same period.
Energy costs are the main reason for rising oil prices as the ongoing US-Israeli war with Iran continues to weigh heavily on oil prices.
The U.S. Bureau of Labor Statistics reported that energy prices rose 16.3% in August compared with the same period last year, with gasoline prices rising 27.4%.
Wage growth is also struggling to maintain its lead: the U.S. Bureau of Labor Statistics found that real average hourly earnings (worker wages adjusted for inflation) were 0.3% lower in August than a year earlier.
The Fed’s preferred inflation gauge also points to continued price growth. As of August, the personal consumption expenditures price index increased 3.4% year-on-year, while the core indicator excluding food and energy rose 3%.
Personal disposable income rose 0.3% in August, but the number was unchanged after adjusting for inflation, according to the Bureau of Economic Analysis.
At the same time, Americans continued to spend, with personal consumption expenditures growing by 0.9% in August and the personal savings rate accounting for 4.1% of disposable income.
retirement extension
According to a Goldman Sachs survey, nearly 70% of respondents said they have postponed at least one major financial goal. This includes 83% of Gen Z respondents, 78% of Millennials and 65% of Gen X. Postponed goals include saving for retirement, building emergency savings, paying down debt and buying a home.
Among Gen Z, Millennials and Gen X, 66% say they expect to delay retirement due to competing financial priorities.
The survey also found signs that workers are seeking additional income to cope with these pressures. About 61% said they had jobs in addition to their primary job, with 71% citing financial need as the reason.
The increase in workload is particularly high among young Americans: 80% of Gen Z and 77% of Millennials report having done extra work, compared with 57% of Gen X and 37% of baby boomers.
newsweek’s Reporters and editors used our artificial intelligence assistant Martyn to produce this story. Learn more about Martin here.
Please contact Newsweek editors about this story: John Fitzpatrick and James Debens