American Retirement Preparedness Drops To Worrying New Level Amid Economic Turmoil | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    Economic volatility over the past year has severely impacted retirement savings, with more than half of households falling short of the savings trajectory needed to retire at their desired level.

    The most recent Retirement Savings Assessment index published by Fidelity Investments showed that the nation's retirement score has declined to 78 as of 2023, marking a decrease of five points from the all-time high of 83 charted in 2020. The typical household now ranks "fair" rather than "good" with respect to their preparation for retirement.

    "The decline in preparedness is being driven by two primary factors: people are saving less and investing more conservatively, which are natural reactions during a challenging financial environment, from the pandemic to market volatility to the latest turmoil in the banking industry," Fidelity Investments said in a press release issued on Tuesday.

    Some 52% of respondents to an assessment from Fidelity Investments may need to "make modest to significant adjustments to their retirement lifestyle" unless they "take action to make up for the shortage" in their savings, while 34% of respondents require "significant adjustments."

    Members of the Baby Boomer generation, those born between 1946 and 1964, are considered the most prepared for retirement. Members of Generation X, those born between 1965 and 1980, as well as Millennials, those born between 1981 and 1996, saw declines in preparedness.

    "American savers continue to navigate through uncertainty, and as a result, may consider pulling back on saving for the future," Fidelity Investments Vice President of Retirement Rita Assaf said. "When it comes to long-term investing, staying focused on your individual goals is critical. Having a plan in place is one solid way to help weather any storm, as we've seen the last few years and weeks with the pandemic, inflation and market volatility."

    Over the past two years, phenomena such as supply chain bottlenecks and labor shortages have worsened overall inflationary pressures. Recent stock market tumult caused significant declines in retirement accounts: Fidelity Investments indicated that the average IRA balance was $104,000 in the fourth quarter of 2022, marking a 23% year-over-year decline from $135,600 in the fourth quarter of 2021, while the average 401(k) balance was $103,900, constituting a decline of roughly 20% year-over-year from $130,700.

    President Joe Biden has expressed economic optimism despite rising inflation rates and other obstacles to recovery from the lockdown-induced recession. Price levels increased 6% between February 2022 and February 2023, according to data from the Bureau of Labor Statistics, a moderation from record levels of 9.1% observed in June 2022, even as inflation remains more than four times higher since the start of the Biden administration.

    "We will continue to make progress in our fight to build an economy from the bottom up and middle out, not top down," the commander-in-chief said. "At the same time, I will do everything in my power to prevent us from going backwards on the progress we've made, including by standing up to Congressional Republicans who threaten economic catastrophe over the debt limit in order to secure tax cuts for the wealthy and large corporations and reckless cuts to critical programs that American seniors and families count on."