Setting money aside for retirement is a huge step towards setting yourself up for success once you leave the workforce. In fact, it's such a big deal that many experts say that it's never too early to start, and every little bit helps.
Now, new research is showing that many Americans are making a major shift when it comes to their retirement savings, and the pros seem to agree that this is a bad sign—not just for retirees, but for the economy as a whole—and they are advising people to stop making this potentially costly mistake. Keep reading to find out if you're guilty of the retirement misstep that 1 in 4 Americans is now said to be making.
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There's new research from the payroll firm Dayforce suggesting that Americans are reducing the amount they put into their retirement savings. According to a report published on March 30, 2026, Americans' average retirement savings rate dropped to 8.9 percent in 2025.
The 2025 drop is said to be the first decline the firm has noted in the past three years, and the changes appeared to be most significant in those employees who earn between $50,000 and $150,000 a year.
Related: This State Was Just Named the Worst Place To Retire in the U.S.
And it's not just the amount of money people have been having withheld from their paychecks and placed into retirement accounts that has decreased, either. The report also suggests that participation rates are down, with fewer people opting to set up a retirement account in the first place.
There was one place where numbers increased, though. According to Dayforce, the number of people taking loans out of their retirement accounts is on the rise. Dayforce's Jason Rahlan spoke with CBS News about the findings, noting that 20 percent of full-time workers took money out of their 401(k) s on loan.
"This should be a warning sign," Rahlan told the publication. "It may be a sign of financial strain."
Related: Popular Vacation Destination Full of Free Museums and Fun Events Named Best Place to Retire in U.S.—and No, It's Not Florida
Should You Stop Contributing to Your Retirement Savings
If you are one of the many folks who have had to pull back due to increased financial strain, you may be wondering whether you're making the right choice. While retirement is never a one-size-fits-all endeavor, it is important to remember that paying your bills and avoiding new debt are huge parts of planning for your future.
If you need to temporarily reduce your retirement contributions to do that, there is nothing inherently wrong with your decision. That said, short-term financial decisions can have a significant impact on your long-term plans, especially if you are close to retirement age. If you are considering this and have concerns, your best bet is to talk to a financial planner or retirement expert to see if this option is the best fit for your personal situation before you make any decisions.
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