US savers hold more card debt than pensions as costs rise
Surging living costs are forcing US retirement savers to cut contributions and hoard cash, a Schroders survey shows, signaling prolonged headwinds for long-term capital inflows.
A third of US investors now hold more credit card debt than retirement savings, according to Schroders' 2026 US Retirement Survey. The research, which polled 1,500 US investors between March 20 and April 15, highlights a widening gap between retirement expectations and financial reality. For asset managers, the data points to structural headwinds in gathering long-term domestic capital.
Participants contributing to workplace plans estimate they will need $1.2 million to retire comfortably. Yet half are projected to accumulate less than $500,000, including 24% who report it is unlikely they will even reach $250,000. "Many participants know they're falling short of their retirement savings goals, and it's no surprise that more than 80% worry about running out of money in retirement," said Deb Boyden, head of US defined contribution at Schroders.
Inflation is the clear culprit behind the funding gap. Roughly 70% of plan participants cite the rising cost of essential expenses—such as housing, healthcare, insurance, and utility bills—as their primary obstacle to saving. The strain on household budgets is further evidenced by the fact that nearly three in ten investors have reduced their workplace plan contributions over the past two years.
For those still contributing, asset allocation presents a separate challenge. Almost a third of savers admit they have no idea how their retirement assets are divided among stocks, bonds, and cash. Among those who do track their allocations, a heavy bias toward safety is apparent. Across all retirement accounts, investors hold 25% in cash, 27% in equities, and 17% in bonds.
This conservative stance is intentional rather than accidental. "It comes down to a fear of losing too much money if the stock market goes down," Boyden explained. However, this risk aversion severely undermines long-term compounding strategies. "If you're not planning to retire in the next five years, holding one-quarter of your savings in cash comes with a significant opportunity cost," she added.
Attempting to build a $1.2 million nest egg with a quarter of funds in low-yield accounts is a losing strategy. With cash currently yielding under 3.6%—practically on par with the inflation rate—real returns are negligible. For market professionals, the survey underscores a dual threat: near-term consumer credit stress is cannibalizing retirement inflows, while excessive cash hoarding limits equity market participation.
