As the sun sets on the hopes of millions of Americans aiming to retire in peace, a dark cloud of financial uncertainty looms overhead. These individuals could find their retirement dreams slipping away. Recent research, conducted in collaboration with the Committee to Unleash Prosperity, reveals a stark reality: the average 401(k) has lost a quarter of its real value over the past two and a half years under the economic policies of Bidenomics.
Study Reveals Massive Losses in Retirement Accounts Under Biden
In an exploration of individual retirement accounts (IRAs) and pension plans, the study exposes huge losses that could significantly delay the retirement plans of countless Americans.
Exploring the Fallout
The study states that upon assuming office, the Biden administration embarked on an ambitious spending spree alongside their big-spending allies in Congress.
Inflation, Interest Rate Hikes, and the Double Blow to Americans’ Retirement Plans
With multitrillion-dollar tabs accumulating and no clear means to foot the bill, the Federal Reserve resorted to creating money to finance the unprecedented expenditure.
This triggered a 40-year-high inflation rate, swiftly followed by interest rate hikes unseen in decades.
Equities and Bonds Hit Hard
According to the report, equities suffered, and bond markets were decimated, delivering a dual blow to people’s retirement accounts.
The Unprecedented Challenges Facing Retirement Accounts
The year 2022 witnessed both equities and bonds experiencing negative average returns, marking the worst year for the bond market since at least 1928.
The Shocking Numbers
The average 401(k) plan plummeted by almost 13%, approximately $17,000, in the initial two years of the Biden administration, amounting to a massive $1 trillion in net losses across all plans.
Inflation’s Toll
Yet, the report stresses, the impact did not stop there. Stratospheric inflation, a direct consequence of excessive government spending, borrowing, and money printing, further eroded the value of 401(k) plans.
Real Losses of $33,200 per 401(k) Plan
On average, each plan suffered a real (inflation-adjusted) loss of around $33,200 or 24.8%, with the study estimating that pension plans, while somewhat more resilient, still experienced real declines.
Pension Plans in Peril
The report paints a picture with dire implications, especially for those relying on pensions for their retirement.
Threats to Pension Fund Solvency
These declines jeopardize pension fund solvency and may pose a significant threat to defined benefit plans with inflation adjustments.
Avoidable Economic Downturn?
The study purports that this economic downturn could have been avoided.
Study Challenges White House Narrative on Bidenomics
Contrary to the White House narrative of inheriting a struggling economy, the study’s data states that Biden took the reins of an economy with a $1.5 trillion annualized growth rate and a mere 1.4% inflation rate.
One-Time COVID Spending Expiry
According to the report, if Biden had allowed one-time COVID spending to expire, the federal deficit could have vanished amidst soaring tax receipts, keeping inflation in check.
More Spending, Multitrillion-Dollar Deficits, and Consequences
Biden chose a different path, advocating for more spending and institutionalizing multitrillion-dollar deficits. According to the study, this had major consequences.
Purchasing Power Loss and Higher Borrowing Costs
It alleges that the average American family has seen a loss equivalent to $7,300 in annual income under Biden due to lost purchasing power and higher borrowing costs.
Fallout from Biden’s Economic Policies
The aftermath includes a surge in multiple job-holders, a record $1.1 trillion in credit card debt, and dwindling savings.
Real Impact on IRA Values
The report alleges that even those who manage to make ends meet are not unscathed. Those planning on retiring with a $1 million IRA have apparently seen their accounts lose almost $250,000 in real value.
Working an Additional Decade
The typical retiree must apparently now work an additional decade to recover these losses.
Bleak Prospects
The report underscores that the prospects for retirement accounts remain bleak as government expenditures outpace consumer spending, and federal debt is set to breach $34 trillion.
Change Needed in Washington
It alleges that if there’s no change of heart in Washington, the prospect of retirement may slip away for many Americans.
Complex Challenges in Bidenomics
The impact of Bidenomics on retirement savings is a complex and multifaceted issue.
However, the research cited in this discussion aims to shed light on the significant challenges faced by millions of Americans attempting to secure their financial futures.
Navigating the Impact on Retirement Savings
The future of retirement savings hinges on a nuanced understanding of economic mechanisms and a collaborative effort by lawmakers to ensure the financial well-being of all Americans.
21 States Where Squatters Can Legally Claim Your Property
Discover how squatters’ rights, or adverse possession, are more than just legal jargon—they’re stories of unexpected twists in the world of real estate. From sunny California to the historical landscapes of Pennsylvania, here’s how these laws could turn the tables on homeowners and squatters alike. 21 States Where Squatters Can Legally Claim Your Property
14 Things That Are Banned in the U.S. but Totally Fine Elsewhere
Ever feel like America’s rulebook was written by someone with a dartboard? Across the pond or down under, things get even wackier. Let’s take a walk on the wild side of global “Do’s” that are definite “Don’ts” in the Land of the Free. 14 Things That Are Banned in the U.S. but Totally Fine Elsewhere
25 American States Nobody Wants to Visit Anymore
Across the United States, some states capture the hearts and itineraries of many, while others remain quietly on the sidelines, overshadowed or misunderstood. These 25 states, facing what you might call a popularity crisis, are brimming with hidden wonders, cultural riches, and natural beauty, awaiting those willing to look beyond the usual tourist trails. 25 American States Nobody Wants to Visit Anymore
20 Foods That Are Cheaper to Eat Out Than Making at Home
In a world where convenience often wins, certain culinary delights come with a lower price tag when enjoyed at a restaurant rather than crafted in your own kitchen. Here are twenty foods that might save you both time and money when indulged in at your favorite eatery. 20 Foods That Are Cheaper to Eat out Than Making at Home
17 Things You’re Paying For, but You Don’t Have To
In the land of the free, there’s a price tag on everything, but savvy Americans know better than to open their wallets for just anything. Here are 17 expenses you’ve been shelling out for without realizing there’s a cheaper or even free alternative. 17 Things You’re Paying For, but You Don’t Have To
The post Retirement Account Holders on Alert Due to Bidenomics first appeared on From Frugal to Free.
Featured Image Credit: Shutterstock / El Nariz
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
