Americans Cut Retirement Savings Amid Rising Costs

Americans are cutting back on retirement contributions as rising living costs, credit‑card debt and other expenses force many to prioritize short‑term needs over long‑term savings, a new survey shows.

Survey finds sharp decline in retirement savings

The 2026 U.S. Retirement Survey, conducted by Schroders, polled 1,500 investors nationwide. It revealed that more than a quarter of respondents who participate in a workplace retirement plan have reduced their contributions, with 70 % making the cut in the past two years.

Even among those who consider a workplace plan their single most important retirement asset, 55 % say they cannot set aside 10 % of their paycheck for retirement. One‑third of participants reported that credit‑card debt now exceeds the balance of their retirement savings.

When asked about their outlook, 69 % believe that the rising cost of living has pushed retirement out of reach for their generation. Despite the common benchmark of $1.2 million as a comfortable retirement target, only 30 % think they will meet the $1 million milestone before they stop working.

Debt and emergencies drive plan borrowing

More than 25 % of respondents admitted they have borrowed from their workplace retirement plan. Of those, 36 % did so to reduce debt, 31 % to cover family or personal emergencies, and 27 % to keep up with everyday expenses.

Among plan participants, 31 % said they have no idea how their retirement assets are allocated. Those who do know tend to keep just over a quarter of their savings in cash—a practice the authors warned could limit growth.

“Rising costs are forcing tough trade‑offs, and saving for retirement is often the first thing that gets deprioritized,” said Deb Boyden, head of U.S. defined contribution at Schroders. “As an industry, we can’t look at retirement savings in isolation. Credit card debt, rising costs and emergency expenses are all part of the same equation.”

Four‑in‑five respondents are at least slightly worried about running out of money in retirement, highlighting the breadth of concern.

Industry response and potential fixes

Boyden suggested that plan sponsors who address debt, costs and emergencies together are better positioned to improve retirement readiness. She noted that “new investment solutions have been developed that can lessen the impact of market drawdowns and thereby provide participants some peace of mind.”

While cash holdings can shield investors from market swings, holding a quarter of savings in cash carries an opportunity cost, especially for those not planning to retire within five years. The report implies that a more diversified approach could help participants balance safety with growth.

Employers may need to rethink how they structure retirement benefits.