A new Goldman Sachs survey reveals that Americans across the income spectrum are increasingly living paycheck to paycheck, driven by inflation, family obligations, and lifestyle inflation, highlighting a widening financial divide.
Goldman Sachs says the squeeze on household finances is not confined to low earners. In a new retirement study, the bank found that Americans at both ends of the income scale are among the most likely to be living pay cheque to pay cheque, underscoring a widening divide in how people cope with day-to-day costs and long-term saving.
The findings come from Goldman’s “New Economics of Retirement” survey of 5,106 respondents. More than 60% of people earning less than $50,000 a year said they were living from one pay slip to the next. Among those bringing in at least $500,000 a year, about 38% said the same. Goldman said both groups were also most likely to have put off financial goals and to pay only the minimum, or less, on credit cards.
The bank said the pressures on lower-income households were driven mainly by inflation in basic goods and housing. Among higher earners, by contrast, the strain often came from family obligations. Goldman Sachs told Fortune that people on larger salaries are frequently supporting parents, children or other relatives, creating a “sandwich generation” effect that can divert money away from retirement accounts and other long-term goals.
That dynamic was reflected in the survey’s breakdown of obstacles to saving. Nearly 28% of those earning more than $500,000 pointed to caregiving or support for family members as one of their biggest barriers, while almost 27% cited medical expenses. For those earning under $50,000, the greatest obstacle was everyday living costs, named by 42.5% of respondents. Debt payments and housing were each cited by 36.8% as major hurdles.
Goldman also pointed to lifestyle creep as a factor for higher earners, saying rising spending can become embedded as income rises and harder to reverse when a family relies on those earnings. Jonathan Barber, head of compensation and benefits solutions at Goldman Sachs Ayco, said on a media roundtable before the survey’s release that many workers are not avoiding retirement saving out of indifference, but because “living expenses, housing costs” and other immediate needs come first. He added that employers can help by offering tools such as financial counselling, debt support and more personalised benefits that make it easier for workers to build a stable foundation before saving for retirement.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
