Debt has become the retirement crisis driver

Eight in ten Americans now say the country faces a retirement crisis, up from 67% in 2020, according to a new National Institute on Retirement Security report conducted by Greenwald Research in late 2025 and released Wednesday. More than 60% of respondents in “Retirement Insecurity 2026: Americans’ Views of Retirement” doubt they will reach financial security in retirement, and while inflation and market volatility top the list of named factors, the competing pressures are housing, healthcare, debt, and wages that have risen too slowly.

Dan Doonan, NIRS executive director and co-author, put the shift in household terms: “Americans are telling us that retirement security is becoming harder to achieve as they struggle with the affordability of everyday life.” That struggle shows up in the debt numbers—nearly 75% of respondents say debt has become a problem for them, and 77% say it prevents them from adequately saving for retirement.

For plan sponsors, that 77% is the number to sit with. It describes a workforce whose obstacle to retirement saving is not a missing enrollment form or a poor understanding of compounding but the cash that leaves the paycheck before the 401(k) deferral happens. A plan that responds by raising the default contribution rate is optimizing for the wrong constraint; the plans that actually move the outcome will treat debt as part of the plan design—employer matches aimed at debt, emergency savings sidecars that keep an unexpected expense from becoming a distribution, and in-plan income options built around the healthcare and long-term care costs the survey repeatedly names.

The politics are equally bleak and outside a sponsor’s control: 76% of respondents worry about Social Security benefit reductions if Congress fails to act, and nearly 85% say Washington leaders do not understand the retirement issues facing working Americans. The response from plan sponsors cannot change Washington, but it can change the tools inside the plan.

The survey also offers a fresh look at the technology question hanging over plan advice: nearly two-thirds of Americans have used AI for other purposes, but 61% say they have not used it for financial topics, and 45% are uncomfortable with AI delivering financial advice. Asked about specific tasks, 38% see value in AI for budgeting, 32% for retirement planning, 30% for paying down debt, and 24% for tax planning.

For sponsors evaluating AI-driven advice tools, the gap between general AI comfort and financial AI comfort is the adoption curve, arguing for AI that supports a human adviser—flagging high-debt households, modeling cash-flow scenarios, generating plan alerts—rather than AI as the primary voice of financial guidance. That trust has to be built with the participant before the algorithm gets to introduce itself.

The retirement crisis has become an affordability crisis, and the solutions that work will be the ones that meet participants on the budget side. The data make the case for a different answer than simply raising deferrals: plans that add debt-aware features and human-centered technology will be responding to the actual financial lives of the people they serve, while plans that don’t will have good participation rates and the same outcomes.