The New Reality of Retirement | When Competing Priorities Take Over

For many workers today, saving for retirement feels almost bleak. According to the 2025 Goldman Sachs Retirement Survey, 42% of Gen Z, Millennials, and Gen X are living paycheck to paycheck. Almost three-quarters say they struggle to save because their money is already stretched across too many other priorities.

And the pressure isn’t slowing down. Goldman Sachs predicts that by 2033, more than half of workers may still be living paycheck to paycheck, and by 2043, that could climb to 65%. It raises a big question: is retirement becoming something most people can’t afford?

Life events make it even tougher. Sixty-six percent of Gen Z and 59% of Millennials have had a major change in the past two years, buying a home, getting married, sending a child to college, or going through a divorce. Seven out of ten people who went through one of these events either paused retirement contributions, borrowed from their plan, or decided to retire later than planned. Greg Wilson, head of retirement at Goldman Sachs, said it best: “Telling workers just to save more ignores the realities they face.” And he’s right. The old advice doesn’t match the challenges people are living with today.

Competing Priorities Are Crushing Savings

Even when people feel on track, the numbers tell a different story. Nearly 70% of savers think they’re doing okay, but 60% expect to outlive their savings. Goldman Sachs calls this the “optimism gap;” people feel confident, but reality is a different story. Every generation is juggling too much. About 30% of Baby Boomers say competing expenses hold them back. That rises to 50% for Gen X, 75% for Millennials, and just over 70% for Gen Z. Student loans, rent, childcare, helping family, there’s a lot pulling their money in different directions.

Employers are seeing it too. Nearly 60% of plan sponsors say their employees are struggling to save because of these competing priorities. Housing costs, for example, have jumped from about a third of household income in 2000 to over half in 2025. College costs are up too, leaving less money to put aside for the future.

Some Progress, But Challenges Remain

There is some good news. Millennials and Gen Z are starting to save earlier and in bigger amounts than past generations. Their savings-to-income ratios are higher than expected, showing they’re paying attention and trying to do the right thing.

Gen X and Boomers face bigger challenges. Many Gen Xers were the first to navigate retirement without traditional pensions, and younger workers, while starting strong, still face new pressures that could slow their progress.

Overall, 55% of people increased their retirement savings last year, while only 8% reduced theirs. The catch is many are still aiming too low while most plan to replace less than half of their income in retirement, which may not be enough to maintain their lifestyle.

Mindset Matters

Goldman Sachs also looked at what makes the biggest difference in retirement outcomes. The largest factor wasn’t just how much people saved—it was “financial grit,” a combination of determination, discipline, and optimism. Personalized advice, early savings habits, access to plans, and insurance all helped too, but mindset made the biggest difference.

Chris Ceder, senior retirement strategist at Goldman Sachs, said, “Saving more is not the only answer. We have to look at different solutions to help people who are feeling the pressure.”

Looking Ahead

People are trying. They’re saving what they can, adjusting when life changes, and doing their best to stay optimistic. But the financial world has changed, and the old strategies don’t always work.

For plan sponsors and advisors, now is the time to get creative. Help employees manage competing priorities through flexible plans, clear communication, and personalized tools. That’s the best way to keep them on track and make retirement feel possible. Most people aren’t ignoring retirement, they’re just trying to make it through today.

Sources:

• https://www.plansponsor.com/gens-z-and-x-millennials-struggle-to-save-for-retirement-due-to-competing-priorities 

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