--- title: Inflation and Recession Fears Have Workers Contributing Less to Their 401(k)s description: U.S. workers are cutting back on how much money they're saving and contributing to their 401(k)s because of inflation and recession fears. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 602 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Mallika Mitra role: Contributing Editor url: https://money.com/author/mallika-mitra/ bio: Mallika Mitra is a contributing editor for Money, based in Chicago. She has covered investing and retirement for seven years and her work has appeared in CNBC, Bloomberg, Kiplinger, AARP, Barron’s, Bankrate, The Daily Upside, ETF.com, The Bond Buyer, PLANADVISER, PLANSPONSOR and Investopedia. education: Craig Newmark Graduate School of Journalism at CUNY Kalamazoo College at_money_since: 2020 articles: 395 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Shopping - Taxes - Technology also_seen_in: - CNBC - Bloomberg - Kiplinger - Barron's - Bankrate - WGN-TV - CBS News Radio - This Morning With Gordon Deal - Everyone's Talkin' Money social: - https://twitter.com/mitra_mallika - https://www.linkedin.com/in/mallika-mitra-4577a386/ published: '2023-06-07T12:00:26.000Z' modified: '2024-04-17T13:09:52.000Z' section: Retirement tags: - News word_count: 330 canonical: https://money.com/inflation-recession-fears-hitting-401k-contributions/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![collage illustration of](https://img.money.com/2023/06/News-Growing-Number-People-Cutting-Savings-401k-Contributions.jpg?crop=0px%2C0px%2C2880px%2C1620px&quality=85) High inflation and recession concerns have U.S. workers cutting back on how much money they’re saving. That's according to a [new report](https://www.morganstanley.com/atwork/articles/state-of-workplace-financial-benefits-study?cid=mnsltwk-can-sotwiiip-14050) from Morgan Stanley, which found that younger workers are scaling back their contributions to savings and retirement accounts the most, but that significant shares of older generations are reducing contributions, too. Overall, 66% of surveyed employees say they lowered contributions to savings due to inflation and/or recession worries compared to 62% last year, according to the report. Contributions to 401(k)s are getting hit especially hard. Morgan Stanley's survey, which was conduced online in March and April, found that: - Millennials were the generation most likely to report [scaling back savings contributions](https://money.com/retirement-savings-by-generation/) due to inflation and/or concerns about a recession, with 80% saying that they’ve done so. - Among Gen Z employees, 78% said they have reduced savings contributions for the same reason. The percentages are lower — but still significant — for Gen X (58%) and baby boomers (40%), Morgan Stanley found. - A large share of respondents (33%) reported reducing contributions to 401(k) plans. Other common cutbacks were to [long-term savings](https://money.com/best-roth-ira/) (28%) and emergency/short-term savings (28%). - Comparing this year's survey to the 2022 results, a higher percentage of employees also said they reduced contributions to college savings funds and health savings accounts this time around. ## Bottom line The Federal Reserve has been [hiking interest rates](https://money.com/fed-interest-rate-hike-march-2023/) for more than a year in an attempt to get inflation under control while avoiding a recession — and data from the Labor Department indicates that [inflation is in fact cooling](https://money.com/inflation-rate-falls-whats-cheaper/). Still, American workers are feeling the crunch of inflation, and it appears they're reducing savings contributions as they "tighten their belts" in response, Brian McDonald, head of Morgan Stanley at Work, said in the report. [7 Best Roth IRA Accounts of 2023](https://money.com/best-roth-ira/) [It’s Getting Even Harder to Save for Retirement. Here’s What You Can Do](https://money.com/saving-retirement-harder/) [Retirement Do-Over: Here's One of the Most Common Regrets for Today's Retirees](https://money.com/retirement-do-over-common-regrets/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/inflation-recession-fears-hitting-401k-contributions/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "401(k)", "item": "https://money.com/401k/" }, { "@type": "ListItem", "position": 4, "name": "Inflation and Recession Fears Have Workers Contributing Less to Their 401(k)s" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/inflation-recession-fears-hitting-401k-contributions/#webpage", "url": "https://money.com/inflation-recession-fears-hitting-401k-contributions/", "name": "Inflation and Recession Fears Have Workers Contributing Less to Their 401(k)s", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-06-07T12:00:26.000Z", "mainEntity": { "@id": "https://money.com/inflation-recession-fears-hitting-401k-contributions/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/inflation-recession-fears-hitting-401k-contributions/#breadcrumb" }, "dateModified": "2024-04-17T13:09:52.000Z" }, { "@type": "NewsArticle", "headline": "Inflation and Recession Fears Have Workers Contributing Less to Their 401(k)s", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/06/News-Growing-Number-People-Cutting-Savings-401k-Contributions.jpg?crop=0px%2C0px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-Growing-Number-People-Cutting-Savings-401k-Contributions" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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