The stifling impact high inflation has on retirement savers

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Retirement Savings News

Retirement,Retirement Planning,Inflation

For many Americans, the daily costs of living have made saving for retirement a struggle. They’ve paused contributions to retirement accounts, pared them...

Until a few months ago, Kloe Lloyd, who works as a policy and advocacy associate for a research firm in Washington, D.C., did not have saving for retirement on her to-do list.

“It’s kind of the wild, wild west of retirement savings right now,” Josh Hodges, the chief customer officer at the, told Yahoo Finance. “There are so many people who are able to put away significant amounts of money for retirement, and that's great, but there's the vast majority of Americans who are probably undersaving for retirement because of inflation.”

Even temporarily halting regular contributions to retirement savings accounts can have lasting repercussions when you calculate the lost growth that comes over time with compounding. Your goal should be to have around 10 times your pre-retirement income saved by the time you reach age 67, according to Fidelity. To break that down,thanks to the phase-in of a handful of provisions in the Secure 2.0 Act. Under the law, employers can now consider student loan payments as qualifying contributions toward retirement-matching programs. They also have the go-ahead to offer their employees the option of putting money into an emergency fund that is paired with their retirement plan.

“Those gains don’t measure what people are actually dealing with,” Lloyd said. “If General Motors’ stock is having a good day, that doesn’t mean I'm going to be able to pay $4 for bell peppers.”

Retirement Retirement Planning Inflation Josh Hodges

 

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