The recurring theme in recent years has been that many people cannot afford to become homeowners in America, according to a new Realtor.com study. Young individuals are finding it difficult to save the money necessary to begin their house journey, while older people feel priced out of the market due to rising housing costs, insurance barriers, and inflation that isn’t slowing down.
Does this end look imminent? Time will tell, but according to a recent Goldman Sachs survey, over three-quarters of American workers—from Gen Z to Gen X—struggle to save for retirement, and around four out of ten are living paycheck to paycheck. By 2033, over half of all workers may be living paycheck to paycheck if nothing changes.
In light of this, Goldman Sachs experts suggested in their study that financial advisors should modify their approach appropriately, particularly with regard to retirement savings. Additionally, this may require you to save far more money than you had anticipated if you are a homeowner.
“Financial Vortex” May Be Approaching Sooner Than Americans Think
According to the 2025 Goldman Sachs Asset Management Retirement Survey & Insights report, “New Economics of Retirement,” Americans of all ages are finding it challenging to accomplish certain life goals, such as saving enough for retirement or purchasing a home, as a result of what they refer to as the current “financial vortex.”
The cost of homeownership as a percentage of income, for example, increased from 33% to 51% between 2000 and 2025, according to the report. This startling statistic amply illustrates how prices have escalated.
“The cost of major life events is taking up a larger percentage of household income, a trend that affects workers at the lowest level of income as well as the highest,” said Greg Wilson, Head of Retirement and Co-Head of Americas Third-Party Wealth with Goldman Sachs.
However, the cost of homeownership isn’t the only rising figure. Health care has increased from 10% to 16%, rent has increased from 21% to 29%, and the expense of private college has increased by an astounding 65% to 85%. Retirement savings are now more difficult than ever due to rising costs. The most common explanation given by survey participants for why their capacity to save was impacted was monthly financial obligations.
Overall, the cost of homeownership has increased by 26% in the last five years, and seniors who have reached retirement are feeling the strain.
Seniors, Social Security & Strained Finances
According to a June 2025 study by The Senior Citizens League, nearly three-quarters of all seniors depend on Social Security for at least half of their income, and nearly 22 million seniors are anticipated to live solely on Social Security. Only 10 states presently allow seniors to use the benefit alone to cover their housing costs, according to a recent Realtor.com analysis—and only if their mortgage has already been paid off.
As a result, having enough money for retirement is essential, and according to the survey, people who have already begun planning feel safer.
According to the survey, pensioners who participated in a customized plan had 27% greater retirement savings than those who did not, while those who had access to an employer-sponsored plan boasted a 29% higher savings-to-income ratio.
If one owns their home, retirement planning entails identifying and tailoring objectives to cover housing expenses.
Although life expectancy has grown, many people base their retirement plans on the average life expectancy or the longevity of elder family members. The average lifespan for retirees in 2000 was 17.5 years. That figure increased to 19.2 years by 2023, and estimates indicate that by 2033–2043 it may have reached 20–21 years.
Further, according to data from the U.S. Bureau of Labor Statistics, from 2000 and 2023, the spending of those 65 and older increased by almost 3.6% annually. This implies that previous retirement benchmarks might not be sufficient anymore.
The “4% rule,” for instance, has governed retirement for many years. However, its creator subsequently criticized it for being out of date and changed the rate at which pensioners consume their money to 4.7%. According to the Sachs report, 58% of respondents expressed fear that they would outlive their savings.
Some Experts Say Now is the Time to Start Saving for Retirement
For many Americans, the goal is to save more money. However, considering the current situation, how is that possible? According to the study, 401(k) plans help employees save regularly, so Sachs suggests making them more widely available.
Approximately 75% of Americans currently have access to a plan that is sponsored by their employer. However, many investors have lost sight of their 401(k) funds due to job changes, rollovers, or lack of portability, resulting in $2.1 trillion sitting dormant in accounts with an average value of $66,691, according to a recent analysis by Capitalize and the Center for Retirement Research at Boston College.
On the other hand, you might be able to make ends meet with the money that many citizens currently possess.
In order to assist remove financial and technical obstacles and make retirement saving simpler for more employees, Sachs also suggests innovative options including state “auto-IRAs” and pooled company plans.
Additionally, parents may also have options available to them at this time to help them get started. Early-savings accounts, sometimes known as “Trump Accounts,” were established by a new tax law to assist employers or parents in setting aside money for a child’s future. Compounding growth can be enormous if used to launch a portfolio early.
A $500 annual contribution from age 1 to age 20 may increase to around $21,000 by age 21. This may grow to around $340,000 by age 65 if invested until retirement, which is about 14% higher than if someone starts saving at age 21.
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