401(k) plans are more available. So why aren't we using them?

For advocates of the 401(k) retirement plan, there is good news: About 70% of America’s private-sector employees are now able to access it, compared to 60% 10 years ago, according to the latest data from the U.S. Labor Department. 

But even as access rises, a significant part of the workforce, 40%, isn’t saving enough for retirement, according to research by Boston College’s Center for Retirement Research, compiled by the Wall Street Journal. 

American workers simply don’t have enough money to invest, a recent YouGov report shows. And when they do, they turn to crypto and riskier investment options over traditional retirement accounts, signaling millennials and Gen Z could face more financial trouble as they age.

Wage growth in the U.S., which slowed in 2024 compared to 2023, hasn’t kept up with inflation, so more Americans are struggling to invest whether through their employer’s plans or on their own. A recent survey of over 1,000 American workers by Resume Now showed that just 6% of respondents are saving, with 73% of workers only able to afford basic living expenses.

“Federal and state minimum wages have not kept pace with inflation, affecting overall wage trends,” Keith Spencer, a career expert at Resume Now, told Salon, noting this trend is expected to continue in 2025. “Many corporations have prioritized profit margins, stock buybacks and executive compensation over raising worker pay.”

Millennial investors are more likely to own cryptocurrency (36%) than invest in a retirement account (34%), according to a new report from YouGov.

“Despite 83% of investors aware of cryptocurrency viewing it as a risky investment, an increasing number of Americans are investing in Crypto,” YouGov researchers found. “This is especially true among Gen Z investors, who are nearly 4x more likely to own cryptocurrency than have a retirement account.”

Millennial investors are not far behind: They are also more likely to own cryptocurrency (at 36%) than have a retirement account (34%), the January report showed.

Rising inflation

Almost half, or 46%, of U.S. investors cite financial constraints as their main barrier to investing, while only 5% attribute their hesitation to past negative experiences, YouGov found. 

While economists are split on whether President Trump’s policies will lead to an economic recession, they say his aggressive tariffs are adding to the overall uncertainty and could potentially slow economic recovery.

Dante Deantonio, senior director of economic research at Moody’s Analytics, told Bankrate the tariffs alone aren’t likely to push the economy into a recession, but they add to the overall risks.

“Recession risks have risen slightly since the election,” he said. “The threat of higher tariffs and changes to immigration policy will raise inflation and weaken overall economic growth.”

The strain on consumers’ wallets is likely to continue this year, as inflation hit a seven-month high of 3% last month, while consumer prices saw their biggest month-to-month increase since August 2023.

“Given the recent surge in inflation and the rising cost of living, real wage growth will likely remain stagnant," said Keith Spencer.