Valentinrussanov | E+ | Getty ImagesRetirement balances for mid-career workers declined from 2019 to 2022, despite gains on financial assets like stocks over that period, according to new research.However, the loss isn’t necessarily as bad as it may initially seem, financial experts said.Median combined 401(k) plans and individual retirement account balances for people aged 35 to 44 declined to $50,000 in 2022 from $63,500 in 2019, according to a recent study by the Center for Retirement Research at Boston College, which analyzed triennial data from the Federal Reserve’s recently issued Survey of Consumer Finances.Savers in the analysis span two generations: older millennials and younger members of Generation X.The CRR report analyzed balances among working households with a 401(k) plan. The balances aren’t adjusted for inflation — which touched a 40-year high in 2022 and eroded the buying power of that money.Meanwhile, retirement balances for older age groups increased over the same period: Savings for 45- to 54-year-olds jumped to $119,000 from $105,800, while those for 55- to 64-year-olds increased to $204,000 from $144,000, the study found.Automatic enrollment creates many smaller accountsAt first glance, falling balances among younger savers doesn’t make sense. U.S. stocks had a nearly 25% return from 2020 to 2022, according to the study — and younger savers tend to be tilted more heavily toward stocks due to their longer investment time horizon.Investment-grade U.S. bonds lost 6.5% over that period.More from Personal Finance:A 401(k) rollover is ‘the single largest transaction’ many investors makeMore retirement savers are borrowing from their 401(k) planHere’s how advisors are using Roth conversions to reduce taxes for inherited IRAsFalling retirement balances for younger households is partly for a good reason, though: The share of Americans age 35 to 44 who have access to a 401(k) plan at work increased by over two percentage points from 2019 to 2022, said Anqi Chen, assistant director of savings research at the Center for Retirement Research and a co-author of the report.Since new, young savers tend to have small 401(k) balances, they dragged down the median balances for the whole age group, Ch …
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[mwai_chat context=”Let’s have a discussion about this article:nnValentinrussanov | E+ | Getty ImagesRetirement balances for mid-career workers declined from 2019 to 2022, despite gains on financial assets like stocks over that period, according to new research.However, the loss isn’t necessarily as bad as it may initially seem, financial experts said.Median combined 401(k) plans and individual retirement account balances for people aged 35 to 44 declined to $50,000 in 2022 from $63,500 in 2019, according to a recent study by the Center for Retirement Research at Boston College, which analyzed triennial data from the Federal Reserve’s recently issued Survey of Consumer Finances.Savers in the analysis span two generations: older millennials and younger members of Generation X.The CRR report analyzed balances among working households with a 401(k) plan. The balances aren’t adjusted for inflation — which touched a 40-year high in 2022 and eroded the buying power of that money.Meanwhile, retirement balances for older age groups increased over the same period: Savings for 45- to 54-year-olds jumped to $119,000 from $105,800, while those for 55- to 64-year-olds increased to $204,000 from $144,000, the study found.Automatic enrollment creates many smaller accountsAt first glance, falling balances among younger savers doesn’t make sense. U.S. stocks had a nearly 25% return from 2020 to 2022, according to the study — and younger savers tend to be tilted more heavily toward stocks due to their longer investment time horizon.Investment-grade U.S. bonds lost 6.5% over that period.More from Personal Finance:A 401(k) rollover is ‘the single largest transaction’ many investors makeMore retirement savers are borrowing from their 401(k) planHere’s how advisors are using Roth conversions to reduce taxes for inherited IRAsFalling retirement balances for younger households is partly for a good reason, though: The share of Americans age 35 to 44 who have access to a 401(k) plan at work increased by over two percentage points from 2019 to 2022, said Anqi Chen, assistant director of savings research at the Center for Retirement Research and a co-author of the report.Since new, young savers tend to have small 401(k) balances, they dragged down the median balances for the whole age group, Ch …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
