Inflation Crushes American Retirement Dreams—Confidence in Savings Plummets

Boomers to Zoomers: Everyone's 401(k) is getting wrecked.

### The Great Retirement Freakout

Inflation isn’t just spiking your grocery bill—it’s vaporizing retirement plans. The dollar’s shrinking faster than a meme stock portfolio, and suddenly that beachfront retirement looks like a studio apartment above a laundromat.

### Wall Street’s ‘Thoughts and Prayers’ Approach

Traditional finance keeps peddling the same old bonds-and-index-funds cocktail while real yields go negative. Meanwhile, Bitcoin’s sitting there with its 200% five-year ROI, laughing in hard-cap deflationary monetary policy.

### The Cynical Kick

Your financial advisor still thinks 2% annual returns are ‘safe.’ Spoiler: That’s not investing—that’s slow-motion financial suicide.

KEY TAKEAWAYS

• Americans with 401(k) plans are less confident about their retirement savings, as tariff-related inflation makes it harder to save.
• Instead of scaling back savings, many are reducing how much they buy and choosing cheaper products.
• Tariffs caused significant stock market volatility and shrank some 401(k)s, so many workers adjusted their plans to weather volatility and inflation.

The bad news: Americans' confidence in their retirement savings is down as inflation persists, according to a Charles Schwab survey.

The good news: Many 401(k) savers are paring back spending to keep up with retirement goals. And a relatively small proportion of investors have cut back their contributions due to financial pressures.

About one-third of Americans with a 401(k) plan said they feel very likely to achieve their retirement savings goals; that confidence level is down from 43% last year. On average, workers expect to retire at 66 and need $1.6 million in retirement savings, which they estimate will last them 22 years.

However, more than half of workers said inflation is their top obstacle to reaching a comfortable retirement. Tariffs have already raised the cost of living, making it harder to save. The cost of health care in retirement is also rising due to inflation, adding to the crunch.

Tariffs also caused significant stock market volatility when they were announced, and some 401(k) savings fell by tens of thousands of dollars. Around the same time, about one-quarter of workers surveyed by Charles Schwab said they adjusted their 401(k) portfolio because of inflation and volatility.

"401(k) investors continue to face uncertainty. Inflation and market volatility remain top of mind, which can make it difficult to develop a long-term retirement strategy," Lee McAdoo, managing director at the Schwab Retirement Plan Services, said in a press release.

Yet, even in the face of rising costs, only 11% of 401(k) investors said they are reducing their contributions because of economic conditions.

It's also notable that the number of people who took out loans from their 401(k) or made an early withdrawal is actually down from last year. Instead, four in ten are cutting back on purchases and choosing cheaper products.