Inflation disrupts retirement planning
More than half of American workers say inflation is the main reason they are struggling to build a retirement fund. According to Schwab’s 2025 survey, 57 percent of 401(k) participants report that rising costs are interfering with their long-term savings goals.
Rather than cutting back on retirement contributions, many savers are reducing everyday expenses. About 40 percent are buying fewer items, and 39 percent are opting for cheaper alternatives. But in some cases, that might not be enough. Adjusting retirement goals may be necessary if inflation continues to erode purchasing power.
“It’s important to regularly reassess what retirement will look like,” said Lee McAdoo from Schwab. “People need to align their savings with their evolving lifestyle expectations.”
Daily expenses limit contribution potential
Another major issue is managing current financial obligations. The survey found that 38 percent of respondents find it hard to contribute to their 401(k) while covering monthly bills. Juggling multiple priorities is common, but there are ways to stay on track.
Experts advise contributing at least enough to receive an employer match. Even small increases of one or two percent can significantly boost long-term savings, especially when using automatic escalation features in many 401(k) plans.
“Raising your contributions gradually, especially after a raise, helps build savings without impacting your paycheck too much,” McAdoo said.
Market volatility adds to uncertainty
Market swings have affected 33 percent of 401(k) investors, creating hesitation around how to invest consistently. Despite uncertainty, financial professionals advise staying the course with regular contributions.
“Even during unstable periods, engagement with retirement planning tends to rise,” said McAdoo. About 23 percent of participants made portfolio changes recently due to inflation or market volatility. Of those, 79 percent shifted toward conservative investments, while 21 percent opted for more aggressive positions.
The key is to match your strategy with both your long-term goals and your tolerance for risk. If unsure, consult with your 401(k) provider for guidance.
Professional support boosts confidence
Confidence in investment decisions increases when people get expert advice. Only 27 percent of savers are very confident managing their accounts alone, compared to 51 percent who feel that way when receiving professional help.
“Professional advice can reduce anxiety and help people make better choices,” said McAdoo. Retirement planning is a long game, and clear guidance can make a major difference in results over time.
