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.
Read more: How much do you really need to save for retirement?
“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.
Also among Goldman’s key findings:
Side hustles are popular
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.”
Read more: Retirement planning by age: The complete guide for your 20s-70s
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%.
Retirement is ‘paid last’
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.
“The answer cannot be continuing to tell people to figure out how to save more,” he said. “Reaching the levels of savings that people need is becoming much more difficult due to all of these factors.”
Retiring before 65
In 2026, fewer people across all age groups said their retirement savings were on track, and most expect they will work longer than they planned.
Close to half of Americans retire earlier than age 65 due to health issues, a layoff, or caring for aging relatives, according to this data.
That finding is pretty consistent across a myriad of studies.
The Employee Benefit Research Institute found that 3 in 5 retirees stopped working earlier than they expected to at 65, with a median retirement age of 62.
In the Goldman survey, roughly half of retirees left the workforce anywhere from a year to five years sooner than planned.
A retirement plan to the rescue
Folks who do a bit of retirement planning feel a bit better about the world. More than 7 in 10 who have a retirement plan say their savings are on track or better, compared with 3 in 10 without a personalized plan.
Nearly half of those with a plan also reported increasing their retirement savings in the last year, compared to about a quarter without one.
“The impact between planners and non-planners is remarkably clear,” said Ceder.
Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including “Retirement Bites: A Gen X Guide to Securing Your Financial Future,” “In Control at 50+: How to Succeed in the New World of Work,” and “Never Too Old to Get Rich.” Follow her on Bluesky and X.
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