More Americans are finding themselves trapped in a perpetual financial rainy day, with competing expenses that make it very difficult to get ahead.
In its 2025 Retirement Survey & Insights Report, Goldman Sachs found that approximately 40% of Americans report living paycheck to paycheck with no flexibility to put aside savings at the end of the month (1).
People face a firestorm of expenses that keep them from saving for retirement, including debt repayment, educational costs, housing costs, caregiving, and unexpected costs. All of these swirl together into what the bank calls a “financial vortex.”
Add inflation to that, plus costly life events like a career gap or divorce, and many workers see their dreams of a sufficient retirement nest egg fade. After covering all of their monthly obligations, 35% of Americans have less than $100 left, according to a 2023 LendingTree survey of 2,011 people (2).
With so little wiggle room in their budgets, it’s not surprising that, according to a recent Bankrate survey, 58% of American workers say they are behind on their retirement savings (3).
Over the last couple of years, wages have struggled to keep pace with inflation. Between the first quarter of 2020 and the second quarter of 2025, and taking inflation into account, wages, as measured by the Employment Cost Index, declined by .02% (4).
That means most people’s paychecks don’t stretch quite as far as they once did — and they’re certainly not getting ahead, even if they continued to work just as much, or even more.
And as the job market weakens, many are finding themselves out of work and in survival mode. Some unemployed workers hunting for jobs can tap into savings, but many lean on credit cards to stay afloat — ultimately ending up underwater in high-interest debt.
With wages stretched thin and immediate financial priorities pushing their way to the top of the budget, retirement savings tend to fall by the wayside.
Already, around 40% of Americans are living hand-to-mouth and unable to contribute to retirement savings. And according to the Goldman Sachs report, it’s estimated that the number of households living paycheck-to-paycheck without the ability to save for retirement will grow to 55% by 2033.
Without any retirement savings of their own, it seems likely that cash-strapped Americans will lean more heavily on Social Security as a source of retirement funding — but the future of that program is uncertain. If Congress does not act, the program’s reserves will be depleted by 2034, and Social Security will only be able to cover an estimated 81% of scheduled benefits (5). That’s a recipe for America’s future retirees to be reduced to living on extremely tight budgets.
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The idea of relying on a depleted Social Security system to entirely fund your retirement might seem like a bleak picture. And, unfortunately, it’s unclear how bleak things could get if a large percentage of America’s seniors rely exclusively on a shrinking Social Security check for their retirement needs.
The good news is that this doesn’t have to be your reality. Of course, saving money for retirement is a challenge. But it is possible to build a nest egg of some size, even if your finances feel pinched right now.
For starters, consider any retirement benefits your employer offers. If your employer offers a matching contribution to your 401(k) or other retirement account, do everything in your power to hit that minimum contribution. When your employer matches what you put in, that’s an instant 100% return on your investment.
After tweaking your budget to take advantage of any employer matching contributions, take a look at the rest of your financial life.
For starters, consider any debts you have. If you’ve been carrying around high-interest debt, like credit card balances, it might be time to make paying those off a priority. Temporarily cutting out discretionary spending could help you make headway on paying down your balances.
Also, map out how much you’d like to have saved in retirement. For example, if you want to save $1 million for retirement over 30 years with a 7% investment return, you’d need to tuck away $825 per month. Even if you can’t make your goal number work right now, make it a point to start saving for retirement each month. If you treat it like an unavoidable bill, you might have a better chance of building up your savings over time.
Look at your budget for big ways to cut spending, like scaling back on housing, food, or transportation costs to free up money to dedicate to retirement savings. As you make progress toward your retirement savings goals, seriously consider the possibility of increasing your income.
Some potential ways to do this include looking for a new job, taking on extra hours, selling things from around the house, or picking up a side hustle. Moving the needle on your income could be the most impactful way to change your financial trajectory. Even though it might take some creativity, funneling that extra income toward your financial goals could transform your current situation and future retirement.
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Goldman Sachs (1); LendingTree (2); Bankrate (3); The Brookings Institution (4); Social Security Administration (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
