Retirement accounts become emergency funds as financial stress rises

"In Allianz Life's Q4 2025 Quarterly Market Perceptions Study, 51% of respondents said they had stopped or reduced retirement savings in the previous six months because of economic conditions. Nearly as many (47%) said they had withdrawn money from retirement accounts during that period. Payroll Integrations' 2025 Employee Financial Wellness Report uncovered similar behavior, with 38% of respondents saying they had tapped retirement savings. About one-third plan to do so again within the next year to cover emergency or everyday expenses."

"Younger workers were the most likely to rely on retirement funds for short-term cash. Allianz found that 62% of Gen Z and millennial respondents had accessed retirement savings, compared with 46% of Gen X and 36% of pre-retiree baby boomers. Payroll Integrations reported that 46% of Gen Z respondents had spent some of their retirement savings. Despite strong markets, many workers said they were not feeling the upside."

"The findings of the reports were recently summarized by PLANADVISOR. 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, Kelly LaVigne, Allianz Life's vice president of consumer insights, said in a statement. Achieving your dream retirement generally takes continual incremental progress over your working years."

Fifty-one percent of respondents stopped or reduced retirement savings in the prior six months because of economic conditions, and 47% withdrew money from retirement accounts. Payroll Integrations found 38% tapped retirement savings, and about one-third plan to do so again within a year for emergencies or everyday expenses. Younger workers accessed savings most: 62% of Gen Z and millennials, 46% of Gen X, and 36% of pre-retiree baby boomers. Sixty-eight percent said personal finances did not reflect market gains, 59% prioritized health care savings, and rising costs, late starts, and volatility hurt retirement confidence.

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