NRF sees first $1 trillion holiday shopping season in American history

American consumers are poised to make retail history this holiday season, with the National Retail Federation forecasting that shoppers will collectively spend between $1.01 trillion and $1.02 trillion in November and December—marking the first time holiday sales have ever exceeded the trillion-dollar threshold. The forecast estimates spending will increase 3.7% to 4.2% compared with last year’s $976 billion in holiday sales, demonstrating remarkable consumer resilience amid economic uncertainty. NRF President and CEO Matthew Shay told reporters that “we’re seeing really positive behavior and engagement from consumers,” adding that “in fairness, that’s been somewhat of a surprise” given the challenging economic environment.

The groundbreaking forecast reveals that consumers plan to spend an average of $890.49 per person on holiday gifts, food, decorations, and other seasonal items—the second-highest amount in the survey’s 23-year history. This spending commitment reflects how Americans continue to prioritize holiday traditions and gift-giving for loved ones despite concerns about inflation and tariffs. Shay emphasized that consumers “remain fundamentally strong and continue to drive U.S. economic activity,” noting that “people save for it, they plan for it, they prioritize it.” Retailers have worked creatively with suppliers to avoid passing on price increases, particularly on household necessities that would disproportionately impact lower-income consumers, while offering both temporary rollbacks and permanent price decreases on many goods. The trillion-dollar milestone underscores the enduring strength of the American consumer and the critical importance of the holiday season, which accounts for 19% of annual sales for the retail industry and drives about 70% of the nation’s gross domestic product through consumer spending.

Holiday budget guide: How to save money and avoid debt this year

Financial experts are encouraging Americans to embrace smart budgeting strategies this holiday season to avoid starting 2026 in debt, with practical tools and techniques that make celebrating affordable and stress-free. The key to holiday financial success starts now with creating a dedicated holiday “sinking fund”—a small pool of money contributed to regularly to cover irregular, planned expenses like gifts, travel, and holiday-related costs without dipping into funds meant for other expenses. Financial advisors recommend performing a budget audit by reviewing recent expenses to identify areas where you can cut back, such as dining out, streaming services, or subscriptions, and redirecting those funds toward your holiday savings.

To supercharge your savings, experts suggest putting your holiday sinking fund in a high-yield savings account with competitive interest rates, as some of the best accounts currently earn upwards of 4% APY, meaning your balance continues to grow without extra work. Casey Brueske, community education development specialist at PenAir Credit Union, emphasizes that “ideally, it’s best to avoid debt during the holiday season” because “debt during the holidays carries over into the new year, putting you in a deficit before you have time to make your financial resolutions.” Additional smart strategies include using cash alternatives for gifting such as credit card points and frequent flier miles, taking advantage of free-gift-with-purchase deals, shopping early to avoid rush shipping fees, and using cashback credit cards or shopping on cashback sites—just making sure to pay the credit card in full when due to avoid interest charges. The Better Business Bureau reminds consumers that a well-planned budget creates a sense of relief by allowing you to spend with confidence, knowing each purchase is part of a realistic plan. By setting clear limits, tracking expenses, shopping smart, and embracing creative gifting like experiences instead of material items, you’ll set yourself up for a festive season that’s both financially sound and emotionally fulfilling.

Americans are saving for retirement at record levels

Americans set aside an all-time high portion of their paycheck in their 401(k) accounts last year, according to Vanguard’s “How America Saves 2025” report, with workers saving an average of 7.7% of their paycheck in employer-provided retirement plans—a record high. Nearly half of participants increased their savings rate, up from 39% who did so in 2022, and when employer contributions are included, the average total participant contribution rate reached 12%, up from 11.3% four years ago. David Stinnett, head of strategic retirement consulting at Vanguard, told reporters that “we recommend saving 12%-15% of your income for retirement,” adding that “this year’s total average savings rate puts workers in that range,” which he described as “a very good thing because what flows from that are positive retirement outcomes.”

The driving force behind the rise in contributions and worker participation in retirement plans connects to more employers automatically enrolling new employees in their retirement plans with no waiting period, with more than 6 in 10 plans now doing so—roughly double the number of plans that did so a decade ago. Even better, nearly two-thirds of employer plans in this year’s report set the default savings rate at 4% or higher, typically earmarking those contributions to a target-date retirement fund that automatically adjusts investment allocations as workers approach retirement. Vanguard’s companion report, “How America Retires,” further reveals that over half of retirees remain in their employer’s plan by the end of the retirement year, and 75% preserve their assets three years post-retirement, demonstrating the effectiveness of workplace retirement plans in helping Americans build long-term financial security. These findings offer encouraging momentum in retirement readiness, with broader access to savings plans, smarter financial strategies, and improved financial literacy helping more Americans build retirement security, particularly among younger generations who are participating in greater numbers and benefiting from improved retirement plan features.

3 ways near-retirees can close a retirement savings gap

Many baby boomers find themselves facing a challenging reality as they approach retirement, with just 40% of workers aged 61 to 65 financially on track to maintain their current lifestyle in retirement, according to recent research from Vanguard. The typical median 61- to 65-year-old will have a $9,000 annual deficit in retirement, representing a 24% shortfall in their funding needs, with Vanguard’s analysis assuming people retire and claim Social Security at age 65. The findings come as a historic demographic shift, known as “peak 65,” is underway in the U.S., with more than 4 million people a year, or about 11,000 a day, expected to turn 65 annually from 2024 to 2027.

Financial experts identify several factors contributing to boomers’ financial position relative to younger generations, including the workplace retirement system shift from a pension-heavy system to a 401(k)-type system, right as young boomers were in their peak earning years. Heidi Hahn, a researcher at the Urban Institute, explained that boomers “didn’t really benefit fully from the pensions their parents or grandparents may have had,” or from the newer 401(k)-type system of savings. However, researchers note that boomers do have strategic options to close the retirement savings gap, including working longer to delay retirement and increase Social Security benefits, tapping home equity through downsizing or reverse mortgages, and adjusting lifestyle expectations. While these strategies come with trade-offs, the bulk of boomers are sitting on a large non-liquid asset—their homes—which can provide financial flexibility. Gen Z and millennials, for contrast, have decades to change course by saving more for retirement and earning compound interest on those balances, highlighting the importance of early and consistent retirement planning across all generations to ensure financial security in later years.