Goldman Sachs: Americans earning below $50k or above $500k most likely to save for retirement

This K-shaped divide has a pronounced impact on their long-term savings at both ends of the income spectrum, the Wall Street giant says.

Of the 5,106 respondents in Goldman’s “New Economics of Retirement” study, a little over 60% of those earning less than $50,000 a year were living from one pay slip to the next. That was followed by those in the $500,000 and upwards income bracket, of which approximately 38% said they were living one check to the next.

A similar result was reported across other personal finance metrics the Goldman Sachs team evaluated. Respondents earning more than $500K were the most likely cohort to report having delayed financial goals (80%), followed by those earning less than $50K at approximately 79%.

Likewise, both income cohorts were the most likely to pay the minimum or less on their credit cards—at approximately 45% of respondents.

Lower-income individuals were primarily stretched by inflation on everyday goods and housing, the bank told Fortune, while those on higher-income levels (between $100,000 and $500,000) were dealing with issues such as caregiving and housing for family members.

“Higher-income individuals may be the financial anchors for their extended families,” a Goldman Sachs spokesman told Fortune. “The data suggests that the ‘sandwich generation’ squeeze can be a key factor redirecting financial resources from long-term financial goals.”

Further data shared by Goldman Sachs illustrates the strain: Respondents earning above $500K were the most likely—at 28%—to cite family caregiving or support among the greatest barriers to their own retirement savings plans. Nearly 27% in the top income cohort also said medical expenses were having a major impact on savings.

Those earning less than $50,000 said debt payments and housing (36.8% apiece) were obstacles in their retirement savings, though the greatest barrier was day-to-day living expenses, with 42.5% saying it was preventing them from saving as they would like to.

Lifestyle creep

Another factor for high earners is lifestyle creep—the notion that increasingly luxurious household and discretionary spending quickly becomes perceived as a necessity as their income grows. Additionally, Goldman told Fortune that if these rising costs require lifestyle adjustments to maintain a more consistent budget, it might be difficult to implement across a family that depends on key financial anchors.

On a media roundtable ahead of the release of the retirement survey, Jonathan Barber, head of compensation and benefits solutions at Goldman Sachs Ayco, said: “The reason they’re not contributing potentially to the retirement plan is not because of its indifference. It’s certain expenses are always going to come first … it’s living expenses, housing costs, things like that.”

He added: “What I think, and these are the conversations we have with our corporate partners all the time: ‘What are some of those tools that a company can offer? What are some of those benefits that can help establish that initial foundation that gives the employee the confidence to contribute to the retirement plan? How do we help with those initial issues like debt, cash flow, and how do we put in some type of personalization into these benefits? And overall, how do we interconnect them?”

“And certainly we’ll talk about financial counseling. That’s a big part of this.”