Stock Market’s Fall Has Wiped Out $3 Trillion in Retirement Savings This Year

The comments below are an edited and abridged synopsis of an article by Irina Ivanova

The US stock market rout that has put US 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.

Stock Market’s Fall Has Wiped Out $3 Trillion in Retirement Savings This Year - BullionBuzz - Nick's Top Six
Display of red electronic board of stock market quotes with down trend graph. Recession concept

The selloff has erased nearly $3 trillion from US retirement accounts. Participants in 401(k) plans have lost about $1.4 trillion from their accounts since the end of 2021. Americans with IRAs have lost $2 trillion this year.

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

Investors’ concerns about spiraling inflation and growing recession risks are weighing on financial markets. Reflecting those fears, the Dow last week fell below 30,000 points for the first time since January 2021. The S&P 500 is down 24% from its record high in January, while the Nasdaq is down more than 30% from its November peak, putting both in bear market terrain.

Up for discussion: The bubble is losing air; more risk, less reward; and paltry 401(k) savings.

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