Savings Slip: Why Americans Are Pulling Back on Retirement Funds

Americans are tightening their belts when it comes to retirement savings. A recent study shows that two-thirds of people have cut back on saving over the past six months. This is largely due to economic uncertainty. More than half have either stopped or reduced their contributions to retirement accounts. Younger generations are feeling the pinch the most. Both Gen Z and millennials are more likely to have stopped saving compared to older generations. In fact, 47% of people have had to dip into their retirement savings just to get by. Healthcare costs are a major concern. Over half of Americans are prioritizing saving for medical expenses over other financial goals. This is because they expect healthcare premiums to keep rising. The outlook for the economy isn't great. Fewer people believe the economy will improve next year compared to last year. Only 45% think the economy will get better in 2026. This is a significant drop from the 59% who felt optimistic at the start of 2025.People are also worried about their personal finances. Only 59% think their financial situation will improve next year. This is down from 67% last year. Despite the stock market hitting record highs in 2025, most people don't feel financially secure. Market downturns and job security are big concerns. Over half of Americans expect a market correction in 2026. Boomers are the most worried, with 60% expecting a downturn. Additionally, 44% are concerned about being laid off due to an economic downturn. Experts warn that cutting back on retirement savings now could hurt in the long run. They recommend working with a financial professional to balance current needs with future goals. They also suggest using risk management strategies to prepare for market swings.