Rising Costs Force Workers to Cut Back on Retirement Savings

A recent study from Goldman Sachs Asset Management reveals that rising living costs are forcing workers to cut back on their retirement savings and take on additional jobs. The study found that over one-third of full-time employees report that their current income barely covers their expenses, while nearly half of those in Generation X experience the same struggle.

The majority of Gen Z and millennial employees claim that their primary job provides financial stability, but their behavior suggests otherwise. Around 80% of these workers took on a side hustle last year because they felt it was necessary to cover their bills.

The study also found that only 39% of individuals increased their retirement contributions in 2026, down from 55% in the previous year. This represents the largest one-year drop in retirement savings increases in six years, according to Chris Ceder, a senior retirement strategist at Goldman Sachs Asset Management.

Ceder attributed this decline to persistent expenses such as housing costs, routine living expenses, and debt obligations. He noted that these essential costs must be paid first, often leaving little room for retirement savings.