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Goldman Sachs Asset Management’s 2025 Retirement Survey reveals that structural cost pressures—housing rising from 21% to 36% of income, childcare from 10% to 25%, private college from 9% to 33%, and healthcare from 12% to 33% since 2000—have narrowed the gap between income and expenses, leaving little room for retirement savings, with 67% of workers citing too many monthly expenses as a constraint.
Rising costs in housing, healthcare, college, and childcare are outpacing inflation and wages and will continue through 2035, creating a persistent structural challenge that has delayed major life milestones like marriage, motherhood, and home ownership while simultaneously creating a psychological disconnect where 68% of workers feel confident about retirement despite 58% believing they will outlive their savings.
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A new national survey from Goldman Sachs Asset Management lays out a structural reality that is reshaping retirement planning in America. The 2025 Retirement Survey & Insights Report shows that the traditional advice to “just save more” no longer fits the financial lives of most households. Rising costs, competing priorities, and shifting life milestones have created what the report calls a Financial Vortex, a set of pressures that consume a larger share of income and leave less room for long‑term saving. The data show that these pressures are not episodic. They are structural, persistent, and accelerating.
The report attributes the squeeze to a long arc of cost shifts that have unfolded since 2000. The cost of basic needs, housing, childcare, college, healthcare, and student loan repayment has risen dramatically as a percentage of income. The chart in the report shows, for example, that the cost of home ownership increased from 21% of income in 2000 to 36% in 2025, while renting rose from 18% to 29%, childcare from 10% to 25%, public college from 8% to 16%, private college from 9% to 33%, and family healthcare coverage from 12% to 33%. These increases have “narrowed the gap between income and expenses, leaving little to save for retirement.”
Workers confirm the pressure directly. Among working respondents, 67% say too many monthly financial expenses affect their ability to save, 64% cite financial hardship, 62% cite caring for and financially supporting family members, 58% cite credit card debt, and 57% cite paying down existing loans.
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The report’s framing is blunt: saving more “may not be an option for many.”
The report also shows that inflation is not hitting all categories equally. Key household priorities, college tuition, childcare, and healthcare, have risen faster than headline CPI for decades and are projected to continue outpacing wages through 2035. The chart in the report shows tuition, medical care, hospital services, and childcare rising at multiples of overall inflation. Goldman Sachs emphasizes that this is a persistent, structural trend, not a temporary flare‑up.
These cost pressures are also reshaping life milestones. The median age of first marriage has climbed, the average age of first‑time mothers has risen, and the average age of first‑time homebuyers has moved sharply higher. The report attributes these shifts directly to affordability challenges and the need to establish financial stability before taking on major commitments.
The survey also captures a striking psychological split. 68% of working respondents say they are very ahead, somewhat ahead, or on track with their retirement savings, and 68% say they are very or somewhat confident they will meet their retirement goals. Yet 58% believe they will outlive their savings.
Optimism and worry coexist because the day‑to‑day cash flow feels manageable while the long‑horizon math does not. The report calls this the “optimism gap," a disconnect between how people feel about their progress and what the numbers imply about long‑term sustainability.
Retirees, however, report stronger outcomes than many savers expect. On average, retirees receive 60% of their pre‑retirement income, 71% are satisfied with that income, and 82% say their retirement lifestyle is the same as or better than before retiring. These findings suggest that lived experience may diverge from conventional replacement‑rate benchmarks and that personalized planning may matter more than rigid rules of thumb.
The report points to several patterns that matter more than income level alone:
Competing priorities scale with income. Higher earners face the same structural cost pressures—housing, healthcare, childcare, education—and these categories expand as income rises.
Savings discipline is uneven. While 55% of workers increased retirement savings in the past year, a large share still targets replacement rates below 50% of pre‑retirement income, far below what most financial professionals consider sustainable.
Generational differences are stark. Only about 30% of Baby Boomers say competing priorities materially constrain saving, compared with more than 50% of Gen X, more than 75% of Millennials, and more than 70% of Gen Z.
Retirement costs are rising faster than inflation. Average expenditures for retirees have grown by 3.6% annually since 2000, and the average retirement length has increased from 17.5 years in 2000 to 19.2 years in 2023, with projections indicating further increases.
The report’s conclusion is clear: higher income alone does not resolve the structural pressures that erode retirement readiness. The new economics of retirement require earlier and steadier saving, personalized advice, protected lifetime income options, and strategies that account for rising costs and longer retirements.
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