Affordability and financial strain are challenging many American families, leading to reduced retirement security for millions of workers.
For the first time in three years, the total retirement savings rate for full-time workers decreased in 2025 to 8.9% from 9.2% the year before, according to new research from Dayforce, a human capital management technology provider.
Participation rates ticked down, while loan use from retirement accounts rose for the third consecutive year. Twenty-six percent of workers reduced their individual contributions.
Declines in savings rates, participation and employee contributions last year, the research showed, were greatest among workers who earn between $50,000 and $150,000 annually.
Dayforce said these findings are a workforce signal. When employees scale back long-term savings to manage short-term financial challenges, the effects extend beyond individual retirement accounts.
See also: How four generations of workers are faring in retirement savings
Financial stress can influence engagement, productivity and retention. Outcomes for employees and employers suffer as a result.
Dayforce noted that its study encompasses the entire full-time U.S. workforce over the past four years, including workers who do and who do not participate in an employer-sponsored plan.
Divide grows in retirement savings
The study found mixed trends in retirement savings since 2022. While overall savings rates and annual contributions rose somewhat, participation declined slightly. During the same period, loan use increased by more than 20%. Critically, each of the four areas has worsened over the past year.
The study also revealed a widening gap between those who are improving their retirement security and those who are falling further behind.
Participation, total contributions and overall savings rates have declined for workers earning less than $150,000 annually, with the greatest changes for middle-income earners. Those in lower-income bands save a fraction of what higher earners contribute and maintain savings rates well below recommended thresholds.
Just 58% of workers who bring in less than $50,000 participate in a retirement plan, compared with more than 80% of those who earn more than that amount.
The analysis showed that gender gaps persist. Since 2022, participation rates have declined by 1.8 percentage points for men and 0.3 points for women. Last year, total savings rates fell for both genders, 0.7 points for men and 0.3 points for women.
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