Americans' Retirement Plans Take a Hit As Cost of Living Bites

A recent survey by Goldman Sachs Asset Management reveals that Americans of all ages are falling behind on their retirement savings as rising living costs place strain on their budgets. In 2026, only 58% of retirement savers reported being on track or ahead of schedule, down from 68% the previous year. Additionally, the percentage of Americans increasing their retirement savings fell sharply to 39% from 55%, while 14% reported reducing their contributions.

The largest single-year decline in the percentage of people increasing retirement savings occurred in six years, indicating a potential shift in momentum. Chris Ceder, a senior retirement strategist at Goldman Sachs, explained that savers are taking fewer actions and their actions are becoming more defensive, suggesting concerns about persistent inflation and market volatility.

The deterioration was observed across all generations, with Gen Z respondents seeing the most significant decline, from 75% in 2025 to 66% in 2026. Similarly, millennials (74% to 61%), Gen X (58% to 49%), and baby boomers (69% to 60%) also experienced a decline in their perceived retirement readiness. The survey of 5,106 Americans in July found that immediate household expenses, such as housing costs, daily living expenses, and debt payments, were increasingly competing with retirement savings.

Housing costs were the biggest financial obstacle for Gen Z (37%) and millennials (36%), while older workers (37% and 33%, respectively) cited everyday expenses. Healthcare costs were a significant issue across generations, cited by 25% of millennials, 23% of Gen Z, 23% of boomers, and 20% of Gen X. Rising prices for essentials, including food (2.7% higher) and shelter (3% higher), are putting a dent in Americans' wallets.

Energy costs, driven by the ongoing U.S.-Israel war in Iran, have also contributed to the increase, with energy prices rising 16.3% in August compared to a year earlier. Wage growth has struggled to keep pace with these increases, with real average hourly earnings actually decreasing by 0.3% in August. Despite this, Americans continued to spend, with personal consumption expenditures rising 0.9% in August, while the personal saving rate remained at 4.1% of disposable income.

Nearly 70% of those surveyed said they had delayed at least one major financial goal, including retirement saving, building emergency savings, paying off debt, and buying a home. Among Gen Z, millennials, and Gen X combined, 66% expected to delay retirement due to competing financial priorities. Additionally, 61% of survey respondents reported doing work outside their primary job, with 71% citing financial need as the reason for this additional work.