More Americans pull back on retirement saving to fund today's needs: Goldman report

Workers are muddling through rising day-to-day living costs by slowing retirement savings, reducing contributions to 401(k)s, and taking on second jobs to fill the gap between income and expenses.

More than 1 in 3 full-time workers, and nearly half of Generation Xers, say their job either only covers current expenses or is not enough to allow them to feel like they are on solid financial footing, according to a new Goldman Sachs Asset Management retirement report .

"Retirement savings momentum appears to be stalling, and rising costs are broadly eroding savers' ability to save," Chris Ceder, a senior retirement strategist at Goldman Sachs Asset Management, told Yahoo Finance.

More than 60% of workers are moonlighting with side gigs and contract work, mostly out of financial need.

While most Gen Z and millennial workers say their jobs provide financial stability, they don't act like it. Roughly 8 in 10 stepped into a side hustle in the past year because they felt they had to if they wanted to pay their bills.

"There are two important perspectives to consider: The good news is that today's job market offers a wide range of flexibility to take on secondary work," said Ceder. "But the concern is that much of this is driven by financial need rather than choice."

Retirement contributions take a back seat

That extra income may offer some relief, but it's not translating to more retirement savings. The percentage of people who increased their retirement contributions fell from 55% in 2025 to 39% in 2026.

"This is the largest single-year decline in the percent of people who increased their retirement savings in six years, potentially highlighting a momentum shift," Ceder said.

"If any finding cuts through the appearance of financial calm, it is this one."

At the same time, the share who reduced their savings increased to 14% — up from 8%.

My guess is if you're reading this column, you already know what's causing the disconnect — housing costs, day-to-day living expenses, and debt payments.

"These are the recurring, non-negotiable costs of ordinary life, which is precisely what makes them corrosive to retirement saving," Ceder said. "These expenses arrive every month, cannot be deferred, and they're paid first. Retirement is often paid last."

Simply advising people to tighten their budgets is no longer a viable remedy.