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.
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
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 who 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.
In 2025, men contributed $1,890 more than women in total retirement contributions from employers and employees. This means that women put aside just 72 cents per dollar that men do for retirement.
Racial and ethnic disparities remain substantial, according to the study. The total savings rates for Asian and white workers are 10.4% and 10.1%, compared with 6% for Black workers and 4.7% for Latino workers.
In 2025, white workers contributed $5,141 more in total retirement contributions from employers and employees than Latino workers, and $4,370 more than Black workers.
Black and Latino plan participants are also nearly twice as likely as white participants to carry an active loan from a retirement account.
When segments of the workforce struggle to build retirement security, Dayforce noted, the effect often goes beyond individual outcomes to organizational performance.
Financial stress can affect engagement and productivity, and employees increasingly view financial well-being offerings by their employers as a reflection of how much they're valued.
Reason for Optimism
The research uncovered some encouraging signs. Since 2022, Generation Z participation, savings rates and contribution levels have improved faster than any other generation:
— 2025 participation: 69.5%, up by 6.1 percentage points since 2022
— 2025 total savings rate: 6.2%, up 1.7 points
— 2025 total contributions: $3,119, up by 60%
Following two consecutive years of gains, total contributions and total savings rates declined in 2025 for baby boomers, Gen Xers and millennials.
While Gen Z's overall savings rates remain lower than those of older cohorts, Dayforce said, the upward momentum shows that behavior can change with greater access, communication and investment. Employers can drive progress in retirement security across their broader workforce, particularly to employees in greatest need of help.
(Adobe Stock)
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