Retirement Savings Are Under Attack — And It's Getting Worse

For many households, retirement planning has always required balancing today’s needs with tomorrow’s goals. But for millions of Americans, that balance is becoming harder to maintain as rising living costs are forcing them to prioritize the present over their financial future.

New research from TIAA highlights just how much inflation and rising costs are disrupting long-term financial plans. According to the survey of 1,000 U.S. adults ages 18 to 65, 43% reduced or stopped retirement contributions over the past year to cover daily expenses. Nearly one in five (19%) stopped contributing altogether, while 12% actually withdrew money from retirement accounts to make ends meet.

The pressure comes at a particularly difficult time. While inflation is threatening retirement savings, Social Security faces its own uncertainty. Just 20% of respondents said they were very aware that the program’s trust fund is projected to run short by 2032. Without congressional action, beneficiaries could face an across-the-board benefit reduction of approximately 22%.

The disconnect is striking: 80% of respondents view inflation and rising living costs as a direct threat to their retirement plans, yet many remain unaware of another potential hit to their future income.

For advisors, the findings highlight an opportunity to revisit retirement assumptions and have more proactive conversations about savings habits, Social Security and income planning. A client who temporarily reduces contributions may not seem like an immediate concern, but even a short interruption can mean missing out on years of compound growth.

Generational differences also matter. Younger workers may have more time to recover from missed contributions, but they also face years of potentially higher living costs. Those approaching retirement have far less time to make up lost ground and may need to rethink when and how they claim Social Security.

Ultimately, telling clients to save more isn’t always realistic when everyday expenses are consuming a larger share of their income. Advisors can add value by helping clients identify manageable ways to stay invested, stress-test retirement projections against potential Social Security cuts and explore other sources of income.

The goal isn’t simply to help clients accumulate more money. It’s to make sure today’s financial pressures don’t quietly undermine the retirement they’re working toward.

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