Americans Cut Retirement Savings as Costs Climb

A TIAA survey finds many Americans are scaling back retirement contributions and tapping retirement accounts early to cover living expenses.

Updated on Nov. 5, 2026 in Retirement Planning

Americans Cut Retirement Savings as Costs Climb

Live Poll

Have you cut back on retirement contributions because of rising living costs?

A TIAA survey found 43% of Americans cut back or stopped retirement contributions in the past year, while 12% took early withdrawals from retirement accounts to cover living costs. Only 7% said they increased contributions over the same period.

Why it matters

The findings point to rising household strain as consumer prices have climbed nearly 30% since the start of 2021, leaving less money for long-term savings. Early withdrawals and reduced contributions could shrink retirement balances for households that can least afford it.

The TIAA survey of 1,000 adults conducted in July found 43% cut back or stopped retirement contributions while only 7% increased them. Whether these reductions are temporary or lasting has not been determined.

The players

TIAA

TIAA is a large financial services organization that provides retirement plans and investment products to millions of participants.

Vanguard

Vanguard is a major investment management firm that publishes annual data on the retirement savings behavior of its plan participants.

The details

TIAA released the report Stretched Thin on October 26, based on a July survey of 1,000 adults. Respondents said they scaled back 401(k) contributions to cover daily expenses and housing or health care costs.

2020: A temporary policy shift waived early withdrawal penalties on retirement accounts.
2021: Consumer prices began a period of nearly 30% cumulative inflation.
July 2026: TIAA surveyed 1,000 adults about their retirement saving behavior.
October 26, 2026: TIAA released the Stretched Thin report.

Market Dynamics

The rise in early withdrawals follows the 2020 temporary waiver of early withdrawal penalties, which made penalty-free access to retirement accounts available during a period of economic disruption. Vanguard data shows hardship withdrawals among its savers rising from 2% in 2020 to 6% in 2025.

Reducing contributions or withdrawing early can lower long-term retirement balances and reduce the benefit of compounding growth. Households facing rising costs may need to weigh short-term relief against future savings goals.

The takeaway

Even small reductions in retirement contributions can add up over time, so reviewing savings rates when budgets tighten can help protect long-term security. Early withdrawals should be weighed carefully against their long-term cost.