Retirement savings among U.S. workers have declined overall, but Generation Z is bucking the trend by increasing its savings rate, according to a new report.
Data released by Dayforce shows that the average retirement savings rate for all workers fell to 8.9% in 2025, down from 9.2% the previous year, marking the first decline in three years. Rising living and housing costs have made it more difficult for many households to set aside money for retirement.
In contrast, Gen Z workers—typically defined as those born between 1995 and 2005—raised their savings rate to 6.2% in 2025, up from 5.9% in 2024, continuing a steady upward trend since 2022.
The report noted that many mid- and late-career workers are cutting back on contributions and increasingly tapping into retirement funds to manage short-term financial pressures.
- About 26% of workers reduced retirement contributions last year
- Average annual savings fell to $5,554, down 5% from $5,860
- The share of workers borrowing from accounts such as 401(k)s rose to 18.6%, the highest level in four years
The decline was most pronounced among middle-income earners with annual incomes between $50,000 and $150,000.
Disparities in retirement savings remain significant.
- Average annual savings:
- Men: $6,671
- Women: $4,781
By race:
- Asian workers: $7,936
- White workers: $7,605
- Black workers: $3,235
- Hispanic workers: $2,464
Experts attribute Gen Z’s stronger savings performance to recent policy changes, including enhancements to 401(k) plans under the SECURE 2.0 Act.
Features such as:
- Automatic enrollment
- Automatic contribution increases
- Improved default investment options
have helped boost participation among younger workers.
As a result, Gen Z participation in retirement plans rose from 63.4% in 2022 to 69.5% in 2025.
