American workers are cutting back on retirement savings to cover rising living costs, according to a new survey — but data from the biggest retirement plan providers tells a more mixed story.

What the survey found

  • 43% of Americans said they have cut back on retirement contributions or stopped them entirely in the past year to keep up with daily expenses, in a TIAA survey of 1,000 adults conducted in July 2026
  • Only 7% said they have increased retirement contributions in the past 12 months
  • 12% said they have taken early withdrawals from retirement accounts to cover living costs, which can trigger taxes and penalties
  • The findings come from TIAA’s report “Stretched Thin: Where Americans Stand on Affordability, Retirement, and Social Security”, released on 26 October 2026
  • Consumer prices have risen nearly 30% since the start of 2021, and the survey suggests five years of cumulative inflation is finally catching up with retirement savers

What the big plan providers report

  • The median Vanguard retirement saver contributed 6.6% of income to a 401(k) in 2025, up from 6.1% in 2020 — but slightly down from a peak of 6.8% in 2023
  • Vanguard savers taking withdrawals for urgent financial needs rose from 2% in 2020 to 6% in 2025
  • Fidelity said only 10.3% of its participants decreased their contribution rate in the past 12 months and only 1.5% stopped altogether
  • Through the second quarter of 2026, Fidelity reported a record total average 401(k) savings rate of 14.4%, combining employee and employer contributions

Why the two pictures differ

The TIAA survey covers a broad sample of Americans, while Fidelity and Vanguard data covers only the retirement plans each company administers. Lower earners appear to be under the most pressure: a Dayforce study found average retirement savings rates fell between 2022 and 2024 for every income group except the top earners.

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