Workers Increasingly Fall Back on Retirement Savings in Emergencies

Americans increasingly see their long-term retirement savings as a substitute emergency savings fund, according to recently published studies.

In Allianz Life Insurance Co.’s “Q4 2025 Quarterly Market Perceptions Study,” 51% of respondents shared that they had stopped or reduced retirement savings in the past six months due to the economic climate, and 47% of those surveyed reported dipping into retirement savings over the same period. The software company Payroll Integrations’ “2025 Employee Financial Wellness Report” found that 38% of respondents had tapped into their retirement savings, and one-third said they planned to do so again in the next year to pay for emergency or everyday expenses.

Younger workers were more likely than older ones to use retirement savings for immediate money troubles. Among Allianz’s respondents, Generation Z (62%) and Millennials (62%) were most likely to have accessed their retirement savings, compared with Generation X (46%) and pre-retiree Baby Boomers (36%). Payroll Integrations found that 46% of Gen Z respondents had spent some of their retirement savings.

Higher Cost of Living Hits Hard 

Even with markets hitting record highs in 2025, 68% of Allianz respondents said their personal finances did not reflect that prosperity, and 59% said their highest savings priority was health care. Likewise, while 36% of Payroll Integrations respondents agreed that they had waited too long to start saving for retirement, 36% said rising living costs were impacting their retirement confidence, 30% said market volatility impacted retirement savings, and 20% said they had to withdraw or borrow from their retirement plan.

Risk aversion is rising, especially among workers in their peak earning years. F&G Annuities and Life Inc.’s sixth annual Risk Tolerance Tracker survey found that 77% of respondents became more financially cautious over the last 12 months. Anxiety was “most pronounced” among those in their 40s, 81% of whom said they were more risk-averse.

While 87% of Payroll Integrations’ respondents said they were contributing to their employer-sponsored retirement plan, 27% of Baby Boomers reported not contributing—a three-fold proportional increase over the 9% of both Gen X and Millennials who were not contributing.

“While it may seem to hurt less in the short-term, cutting back on retirement savings now may hold back your ability to achieve your retirement goals in the long run,” said Kelly LaVigne, Allianz Life’s vice president of consumer insights, in a statement. “Achieving your dream retirement generally takes continual incremental progress over your working years.”

‘Need for a Comprehensive Plan’

Nearly half (46%) of F&G’s Gen X respondents said they were concerned about whether Social Security would be available when they retired, and 40% of respondents in their 40s shared similar doubts. Only 20% of Baby Boomers surveyed were concerned about Social Security’s viability.

When Payroll Integrations asked respondents how employers could help improve their financial wellness, their most common responses included access to savings platforms (44%), sharing best practices for retirement accounts (43%), and access to a financial adviser or coach (35%).

Ron Barrett, F&G’s chief distribution officer, agreed that professional guidance is irreplaceable.

“In environments defined by economic uncertainty, the need for a comprehensive plan backed by a financial professional has never been more important,” Barrett said in a statement. 

Allianz Life surveyed 1,005 U.S. adults in November 2025, and Payroll Integrations collected information from 250 full-time workers through the data platform Dynata from June through July 2025. F&G’s study, conducted by Censuswide from November 14 through November 26, surveyed 1,601 U.S. adults age 30 or older with at least $10,000 in investable assets.