The extreme market volatility of 2022 has wiped $3.4 trillion from Americans’ retirement savings since January, according to the Center for Retirement Research at Boston College.
401(k)s have lost about $1.4 trillion, and individual retirement accounts (IRAs) have fallen by $2 trillion, according to a blog post this week by the center’s director, Alicia Munnell.
Year to date, the S&P 500 is down 21%, Nasdaq has fallen by nearly 30%, and the Dow has lost 16%.
The market rout has gotten to the point where many near-retirees are afraid to look at their retirement account statements. Shades of the financial crisis of 2008 are reappearing, with many investment sectors traditionally not correlated, most notably stocks and bonds, declining in lockstep.
One woman tells Fox Business she and her husband have a 401(k), 529 college savings plan and a Thrift Savings Plan, with the latter account alone down $200,000.
Another woman says her investments have been “decimated. It’s horrible. I was thinking I might be retiring in the next year or two. Now I don’t know. I don’t know when I can do that.”
One man said more sanguinely of his investments, “They’re not doing too good right now. We’ve been losing a lot of money.”
Another investor confirmed reports of people using their credit cards or dipping into savings accounts to pay for everyday expenses: “It’s been painful. I honestly had to take some funds out of my 401(k) to, you know, support myself and my family, with the inflation and everything else that’s happening.”
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