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Americans aren’t as prepared for retirement as they think

A recent analysis finds a growing disparity in preparedness

Updated:

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Mark Huffman
Reporter

Mark Huffman has covered consumer issues since 2004, with a special focus on protecting and empowering older adults. A former news correspondent for the Associated Press Radio Network, Westwood One, and ConsumerAffairs, Mark brings decades of journalistic experience to RetirementLiving.com. He is passionate about giving consumers a voice and helping them make informed decisions. Mark has also created educational content, including Senior Scam Alert, a video resource designed to help seniors recognize and avoid fraud. He holds a B.A. from the University of Kentucky and lives with his family in Richmond, Virginia.
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Photo by Andre Taissin on Unsplash

Key Insights

  • New Dayforce report finds widening retirement-savings gaps across income, gender, and race
  • Low-income workers and women lose ground, while high earners and Gen Z make gains
  • Experts warn the disparities signal a deepening national retirement-security crisis

A new report suggests Americans aren’t ready for retirement, at least not financially. An analysis by Dayforce, Inc. warns that stark and widening disparities are shaping who will — and will not — be financially prepared for life after work. 

The Retirement Divide, published by the global HCM provider, examines the behavior of full-time American workers between 2021 and 2024 and reveals that income, gender, race, ethnicity, age, and access to employer benefits all play critical roles in determining retirement outcomes.

The report shows a growing chasm between high- and low-income earners. Workers making more than $150,000 have seen steady increases in retirement-plan participation, total contributions, and savings rates since 2022. In contrast, workers earning under $150,000 experienced declines across all three measures.

Those earning less than $50,000 fared the worst. Their participation in employer or individual retirement plans dropped from 58% to 52.9%, and their total savings rate slipped from 4.9% to 4.6%, signaling increased financial strain and reduced long-term security.

Dayforce’s global head of Sustainability & Impact, Jason Rahlan, called the findings “a wake-up call,” emphasizing that millions of workers risk falling short of a stable retirement without systemic change.

Gender and racial disparities deepen

The gender gap in retirement participation has grown to 3.9 percentage points, with 79.9% of men contributing to a plan versus 76% of women — a widening divide since 2021.

Racial gaps are even more pronounced. In 2024, 84.6% of white workers participated in a retirement plan, compared with 68.2% of Black workers and just 61.1% of Latino workers. 

Borrowing from retirement plans also varied sharply: over one-quarter of Black and Latino participants carried an active loan, nearly double the 14.9% rate among white workers. Heavy loan usage can stall long-term savings growth and erode financial resilience.

Gen Z emerges as a bright spot

Despite the broader challenges, Gen Z workers demonstrated the fastest progress of any generational group. From 2022 to 2024:

  • Participation jumped from 64% to 68.7%
  • Savings rates increased from 6.6% to 7.2%
  • Total contributions surged 24%

The findings suggest that younger workers — many entering the workforce amid inflation and economic uncertainty — are taking a more proactive approach to retirement savings.

A call to action

Matt Bahl, vice president for Workplace Financial Health at the Financial Health Network, said the report “reveals for the first time the true state of retirement savings in America,” adding that the disparities expose the structural challenges underpinning the nation’s retirement-readiness crisis.

Both Dayforce and the Financial Health Network say the data underscores the urgent need for policy solutions, stronger employer support, and broader access to retirement-planning tools — especially for underserved communities.