According to many surveys, America’s top priority is the struggling economy. The markets keep falling, inflation doesn’t appear to be under control yet, and the cost of living has surged.
Just this week, President Joe Biden claimed the economy was “strong as hell,” a comment that elicited immediate criticism. Many Americans are feeling the crunch and they see a different situation.
This goes double for those with retirement plans — because they’ve all lost a huge chunk of their savings in 2022.
According to a study conducted by E.J. Antoni and Stephen Moore, on behalf of the Committee to Unleash Prosperity, the average 401K decline per person is stunning. And the total is even more shocking.
At the start of the year, the average 401k plan had over $135,000 in it. But as the markets fell precipitously throughout 2022, these funds have tumbled badly.
All told, we’re looking a couple trillion dollars in losses, which is already having an impact on voter mindsets. We’re starting to see plenty of evidence that people are fed up with the current leadership.
According to the study results:
The average person’s 401(k) has lost some $34,000 in value since the start of the year, new economic research found.
E.J. Antoni and Stephen Moore … released their research this week. The two pored through data compiled by financial services firms and found that since the start of the year, 401(k) plans have suffered more than $2 trillion in losses.
In all, it’s about a 25 percent decline, a dramatic fall from the start of the year.
In comparison, Antoni said that Fidelity Investments stated in its Q2 report that the average 401k balance had already plummeted 21%. And that was in just the first two months of 2022.
He added that their number — a 25% decline — is actually a conservative estimate, and that means millions of Americans have suffered huge losses.
Of course, those who conducted the study reminds us that if the stock and bond market staged a “miraculous rebound” in the coming months, the values would go back up. But it may be more like years.
And for those who are already retired, you’re getting hit with major losses right now. This could be very difficult for many senior citizens.
This has resulted in many people holding off on retirement; they’re just going to keep working and hope the market returns at some point. But either way, they’ll have to keep working for a while more.
Recently, the government announced a big COLA increase for social security — at 8.7% it’s the biggest jump since 1982.
But even that might not keep up with inflation. Prices started surging earlier this year and currently, inflation is still at 8.2%. It’s likely the Federal Reserve will apply another big interest rate hike.
Furthermore, another report shows Americans lost about $6,000 in purchasing power in 2022 (via data from the Bureau of Labor Statistics on nominal wage gains and adjusted for inflation).
Monthly savings have dived drastically as well, down 83%. Overall, the economic crunch is hitting everyone especially hard, and the numbers are starting to reflect that.
- A study finds that Americans lost an average of $34k in 401k retirement savings in 2022.
- Overall, that’s a $2t loss for the country. Americans have lost $6k in purchasing power and monthly savings have plummeted 83%.
- All of this could result in a change in leadership during the midterm elections, as many voters say the economy is their #1 concern.
Source: Washington Examiner