Retirement savings suffer as 46% of American workers use the cash to pay bills today. But what’s the long-term cost?

As workers contribute less to retirement savings, they’re also becoming more dependent on Social Security, with 41% of employees aged 55 and older expecting it will be their primary source of retirement income, according to the NFP report, which was based on a survey of 1,000 working adults in the U.S. NFP, part of Aon Plc, is an insurance and reinsurance broker.

But, with the Social Security trust fund projected to run out by 2032, future retirees may only receive 78% of their scheduled benefits.

So a traditional retirement — where you retire at 65 and have enough money to maintain your current lifestyle throughout your golden years — is becoming increasingly out of reach for many Americans.

Retirement savings take a back seat

It’s not the only study of late to come up with similar findings.

According to Schroders’ 2026 US Retirement Survey, 27% of U.S. investors said they’ve decreased contributions to their workplace retirement plan, such as a 401(k), 403(b) or 457 plan — with 70% doing so in the past two years.

Not only are they decreasing contributions, 27% say they’ve borrowed money from their plan, either to pay down credit card or other debt (36%), cover unforeseen emergencies (31%) or keep up with the cost of living (27%).

Many plan participants believe the rising costs of housing, healthcare, utilities and insurance are putting retirement “out of reach” for their generation. 55% say they can’t save 10% of their paycheck for retirement and 33% have more credit card debt than retirement savings.

In another survey, nearly half of Americans said they’re skeptical they’ll ever be able to fully retire.

“Despite expressing confidence in their ability to retire on time, Americans are prioritizing their financial needs today instead of planning and saving for the future,” according to Thrivent’s 2026 Retirement Expectations Survey of more than 2,000 Americans.

And while retirement savings are taking a back seat to competing expenses, retirees in 2026 are more likely to cite inflation, political instability and global economic conditions as having a negative impact on their retirement when compared to Thrivent’s 2025 survey.

Financial pros typically recommend saving 10% to 20% of your income for retirement, bumping up your savings rate as your salary increases. But for those who see a bigger chunk of their paycheck going toward everyday essentials, that may seem like an impossible task.

However, not saving enough for retirement means you’ll be more dependent on government benefits, which could potentially reduce your standard of living and leave you more vulnerable to medical emergencies. It could also mean delaying retirement or having to re-enter the workforce after retirement to cover the bills.

Getting back on track

Of course, not every pre-retiree wants a ‘traditional’ retirement. Some may choose to keep working after they reach full retirement age because they want to, or turn a hobby or passion into a revenue-generating enterprise. Some may look for ways to generate passive income, like renting out their home while they travel the world.

A retirement budget can serve as a starting point. What are your goals in retirement? How much will you need to live comfortably? And what are your sources of retirement income (including Social Security, retirement savings, investments, annuities, passive income and work)?

Americans participating in a workplace retirement plan think they’ll need $1.2 million to retire comfortably, according to Schroders’ retirement survey (and only 30% believe they’ll reach the $1 million milestone).

But everyone has a different magic number.

You can expect to spend anywhere between 55% to 80% of your annual income each year through retirement, according to Fidelity Viewpoints. If you make less than $50K annually, then Fidelity recommends an estimated retirement income replacement ratio of 80%. But if you make more than $120K annually, then that ratio might range from 55% to 65%.

While some non-retirees fear they’ll have to work longer than they want to, some see retirement as more of a transition — not a finish line. And, according to the Thrivent survey, 36% anticipate that they’ll continue to earn income after retiring from their primary career.