Stock market’s fall has wiped out $3 trillion in US retirement savings this year

The U.S. stock market rout that has put U.S. equities in a bear market isn’t just reducing the net worth of billionaires like Elon Musk and Jeff Bezos. It’s also taking a toll on Americans’ retirement savings, wiping out trillions of dollars in value.

The selloff has erased nearly $3 trillion from U.S. retirement accounts, according to Alicia Munnell, director of the Center for Retirement Research at Boston College. By her calculations, 401(k) plan participants have lost about $1.4 trillion from their accounts since the end of 2021. People with IRAs — most of which are 401(k) rollovers — have lost $2 trillion this year.

This year’s stock slump is the most severe market downturn since March of 2020, when COVID-19 erupted in the U.S. Historically, 401(k) investments take about two years after a market decline of this size to regain their previous value.

“Anybody who has to retire when the market is down is in a bad position,” Munnell said.

“Younger people, you can kind of wait it out — these things have come back time and time again,” she added. “But people who use their retirement money to support themselves really suffer in this kind of event.”

Source: CBS News