In the NY Post, E.J. Antoni explains how the inflation of the Biden era is making it harder for Americans to retire. He writes:
When he [Biden] took office, the economy was growing at a $1.5 trillion annualized rate and recovering an average of a half- million jobs per month.
Inflation was a mere 1.4%, lower than the Federal Reserve’s 2% target.
Just 18 months later, Biden managed to run up inflation to 40-year highs, with prices rising in a single month about as fast as they increased in the entire year before he took office.
Simultaneously, the economy contracted for two consecutive quarters — what we used to call a recession.
While inflation has come down from that breakneck pace, it is reaccelerating, and economic growth has been anemic.
The labor market is still missing between 4.5 million and 5.5 million workers, leaving employment far below its pre-pandemic trend.
Accounting for all these absent workers yields an unemployment rate that’s more than 6%.
It’s the persistent inflation really hurting those who were hoping to retire.
If you were a prospective retiree, planning to leave work with $1 million in savings and investments, you’ve had to radically adjust that calculus because prices have risen about 17% on average since Biden took office.
That means you need an extra $170,000 in savings to have the same real value in your nest egg.
But that assumes inflation will return to its low, pre-Biden level — which won’t happen any time soon: Government spending, borrowing and money-creating remain elevated.
Action Line: If you want to retire successfully, you need to save til it hurts. Then build a strong plan with a professional and stick to it. When you’re ready to get started, let’s talk.
E.J. Smith - Your Survival Guy
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