Middle-class savings are being outrun by debt, report finds

By late 2025, the median middle-class household had $64,000 in retirement accounts and a financial priority that outranked adding to them: paying down debt, which 58% called their top current priority, ahead of retirement saving at 50% and emergency funds at 42%. The report behind those figures, produced by the Transamerica Center for Retirement Studies with the Transamerica Institute and covered by InvestmentNews, surveys more than 7,600 U.S. residents with household incomes between $50,000 and $200,000.

Catherine Collinson, CEO and president of Transamerica Institute and TCRS, frames the report as a question of how the middle class contends with rapid change, inflation, and mounting financial pressures. The pressure is visible across the budget: eight in 10 not-yet-retired middle-class workers say today's cost of living is making it harder to save for retirement, 57% say debt directly interferes with putting money aside, and 55% say they simply do not earn enough to contribute meaningfully. The inflation response has been to consume the floor—72% have taken at least one action, including 40% cutting day-to-day spending, 34% drawing down savings accounts, and 23% accumulating new credit card debt.

For plan sponsors, that ordering is the number to stare at: a participant who lists debt ahead of retirement is not going to be cured by a higher default deferral rate; the plan needs to meet the household where it actually lives. The gender gaps run in the same direction as decades of prior research—women have saved a median $49,000 versus $82,000 for men, and 35% of women say their top financial goal is simply getting by, compared with 27% of men. Wage disparities, career interruptions for caregiving, and longer life expectancy compound the difference, and women are more likely to expect Social Security to serve as their primary retirement income.

Auto-enrollment and escalation remain necessary, but the Transamerica numbers suggest they are being outrun by debt service. Until plan designs treat debt reduction and emergency savings as first-line retirement features, the $64,000 median will keep reading as a ceiling rather than a floor.