Workers Cutting 401(k) Contributions
New reporting shows full‑time employees reduced 401(k) participation and contribution rates last year amid affordability pressures—an emerging 'warning sign' for retirement readiness. That trend creates a tangible prospecting narrative around recovery and contribution optimization. (cbsnews.com)
Dayforce-linked reporting shows the average full‑time worker 401(k) contribution rate fell to 8.9% in 2025 from 9.2% in 2024, with one in four workers cutting annual retirement savings and the largest pullback among earners of $50,000–$100,000. (cbsnews.com (cbsnews.com)) (cbsnews.com) Workers earning under $50,000 saw plan participation drop from 58.0% to 52.9% and their overall retirement savings rate decline from 4.9% to 4.6% in the 2021–2024 Dayforce dataset. (dayforce.com (dayforce.com)) (dayforce.com) Dayforce measured a record rise in retirement‑account borrowing, with nearly 20% of full‑time workers taking loans in 2023, a trend that coincided with lower contribution rates for middle‑income groups. (prismnews.com (prismnews.com)) (prismnews.com) Gen Z was an outlier: participation rose from 64.0% to 68.7% and Gen Z savings rates increased from 6.6% to 7.2% (total contributions up 24% since 2022) even as older cohorts trimmed contributions, per Dayforce’s “Retirement Divide.” (dayforce.com (dayforce.com)) (dayforce.com) Dayforce found high earners pulling away — workers with $150,000–$250,000 in pay contribute nearly 13× more annually than those under $50,000, and participation/contributions rose for those above $150,000 while falling for workers below that threshold. (dayforce.com (dayforce.com)) (dayforce.com) The dataset also shows stark racial gaps: total annual retirement contributions were $11,676 for white workers versus $5,404 for Black workers and $5,389 for Latino workers, and loan usage among Black and Latino participants was 26.4% versus 14.9% for white participants — figures that point to concentrated outreach opportunities in communities with higher loan rates. (401kspecialistmag.com (401kspecialistmag.com)) (401kspecialistmag.com)
