Retirees’ Retirement Savings Take a Hit: Examining the 23% 401(k) Loss in 2022
According to the Fidelity Investments report that was published on February 23, retirees saw an average decline of 23% in the value of their 401(k) savings in 2022.
“Given all the stresses in the world today, such as natural disasters and geo-political events, Americans continue to confront challenging times in our economy,” Kevin Barry, president of workplace investing at Fidelity, said in a statement.
Many people in the United States are alarmed by this news because they rely on their retirement savings to ensure that they will have financial security during their golden years. The report looks at how geo-political events, inflation, rising interest rates, and unexpected events (like the COVID-19 pandemic) have affected retirement accounts and the stock market. Because of widespread market volatility and economic uncertainty, the value of many retirees’ savings has gone down by a large amount.
The question then is, what can people who are already retired or who are getting close to retirement do to lessen the effect that market downturns have on their retirement accounts? The first and most important thing you should do is talk to a financial advisor, who can help you make a plan for retirement that fits your specific needs and goals. This means taking into account how comfortable you are with risk, how you plan to invest, and your overall financial situation.
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How can we reduce the impact of market downturns on retirement accounts?
It’s important to have a diversified portfolio of investments that can handle the ups and downs of the market. The most recent report on losses in 401(k) accounts is a good reminder of how important careful planning and good risk management are when it comes to planning for retirement. If they have the right advice and plans, retirees can protect their savings and have a good time in their later years.
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