October 18, 2022
Savings Accounts, 401(k)s Collapse
Americans’ finances are suffering in the Democrats’ broken economy. People are saving less, the value of retirement accounts is collapsing, and real-wages are shrinking as inflation skyrockets and the economy sinks further into a recession.
Stephen Moore & E.J. Antoni Op-Ed: A year ago we were assured by the White House economic wizards that these rapid price increases in everything from groceries, to rental cars, to gasoline at the pump, to health insurance were merely “transitory.” Whoops.
The most immediate sticker shock from Bidenflation, of course, has been to shrink real take-home paychecks of workers. We have calculated that over the past 20 months, this rise in consumer prices over wages means that the average family in America has lost nearly $6,000 in purchasing power. This from the Lunch Bucket Joe president who promised to help boost the incomes of the middle class.
Negative returns and inflation are eating away at the value of retirement accounts, including 401(k)s and pensions. 401(k)s have lost more than $2 trillion in value, and pensions have suffered almost $4 trillion in losses.
Stephen Moore & E.J. Antoni Op-Ed: The average 401(k) plan had over $135,000 at the start of this year. Today, those assets have shrunk on average to about $101,000. In other words, the average 401(k) plan is down about $34,000 — more than 25% in less than one year!
More traditional pension funds also are getting flattened by inflation. At the beginning of this year, pensions in the US had $27.8 trillion in assets. Now, it’s under $24 trillion, a drop of about 15% that has wiped out the last two years’ worth of gains — nearly $4 trillion.
Bottom Line: Washington Democrats’ bad policy decisions are wiping out Americans’ savings and retirement accounts.