A recent article by Research Fellow EJ Antoni with The Heritage Foundation discusses the impact of the economic policies under the Biden administration on retirement savings. The article claims that Bidenomics has taken a big bite from your retirement. Is this true? Here are the main points you need to know.

Reduction in 401(k) Values:

Reduction in 401k Values
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Antoni claims that the economic policies referred to as “Bidenomics” have reduced the real value of the average 401(k) by about 25% in the last two and a half years.

Impact on Individual Retirement Accounts and Pensions:

Impact on Individual Retirement Accounts and Pensions
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A study published by the Committee to Unleash Prosperity indicates significant losses in individual retirement accounts (IRAs) and pension plans under the Biden administration, potentially delaying many Americans’ retirement plans.

Government Overspending and Regulation:

Government Overspending and Regulation
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Antoni attributes these losses to government overspending and overregulation, stating that the Biden administration and Congress ran up multitrillion-dollar deficits financed by the Federal Reserve.

Inflation and Interest Rate Hikes:

Inflation and Interest Rate Hikes
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Antoni discusses how 40-year-high inflation, followed by rapid interest rate hikes, negatively impacted both equities and bond markets. This combination is said to have led to significant losses in retirement accounts.

Worst Year for Bond Market Since 1928:

Worst Year for Bond Market Since 1928
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The bond market experienced its worst year since at least 1928, contributing to the decline in retirement account values.

Total Losses and Inflation’s Role:

Total Losses and Inflations Role
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Antoni estimates total net losses across all plans at around $1 trillion. It also highlights that inflation has further eroded the value of 401(k) plans, leading to a real loss of approximately 24.8%.

Pension Plan Losses:

Pension Plan Losses
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Pension plans are reported to have lost $3.3 trillion in real value during the Biden administration, posing a threat to the solvency of these funds, especially those with defined benefit plans that include inflation adjustments.

Economic Conditions Prior to Biden’s Presidency:

Economic Conditions Prior to Bidens Presidency
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Antoni argues that the economic situation was more favorable before Biden took office, with lower inflation and a growing economy. It criticizes the administration’s continuation of high deficit spending.

Impact on American Families:

Impact on American Families
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Antoni claims that the typical American family has lost the equivalent of $7,300 in annual income under Biden, leading to increased credit card debt and hardship withdrawals from retirement savings.

Outlook for Retirement Accounts:

Outlook for Retirement Accounts
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Antoni suggests that the situation is unlikely to improve significantly for retirement accounts as government expenditures continue to outpace consumer spending.

In summary, the article critically views the Biden administration’s economic policies, arguing that they have significantly harmed Americans’ retirement savings through a combination of inflation, high government spending, and adverse effects on financial markets.

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