Inflation Crushes Retirement Accounts!
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Yeah, inflation is crushing, retirement accounts. E.J. and Tony from Heritage, economists at Heritage, they’ve actually taking a look at the numbers and the average 401k plan has grown from 2021 to 2024 by eleven thousand dollars. However, you adjust for inflation.
It represents a $12,000 loss, 9.2%. Think about that for a second. Many have a difficult time with inflation in numbers. And I always advise people to play around. You play around with the government’s calculator when it comes to inflation. Best way I can explain this. You do this with kids sometimes. You ask a kid, you joke around. Which weighs more, a pound of lead or a pound of feathers?
Same, same thing. Pound of lead, pound of feathers, same exact thing. However, the money that you have, the value of it is dropping. Okay, you can’t look at the dollar as a terms of measurement, an accurate term of measurement of buying power. You can’t because of inflation. And because of these numbers, I mean, I was blown away by this. I really was.
that that poorly, you know, average 401k balance only 11,000 bucks from 2021 to 2024. Again, adjusted for inflation represents a $12,000 loss. Digging a little bit deeper into this. I found that and it’s unfortunate, it’s obviously not Markowski investment accounts. Way too many people out there are on SETIT.
and forget it portfolios where they set up their 401k, they answered a few questions and there they they’ve got a balance in stocks and way too much in bonds. Obviously, retirement accounts that have significant bond portfolios have gotten destroyed. Again, you’re taking a look at the performance of
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the bond market. mean, it hasn’t been this bad. What you can almost go back to the 1920s for crying out loud. It’s how bad it’s been for the bond market. Many people having way too much in fixed income, and it’s performed God forsaken. Again, this bothers me, it really does. Because again, it’s a problem we have with financial planning here in this country. There’s not enough firms, quite honestly, like ours, that are willing to help
everyone out and made the firms that actually purport to help smaller investors out. Put people on set it and forget it portfolios and just collect their fees along the way. We’ve been very clear. I don’t I don’t give recommendations here on the program stock recommendations, but we’ve been very clear when it comes to fixed income. Very, very clear the fact that hey, you know what? Everything that we’re buying is short end.
Short term stuff and when those rates bounce up in flight, yeah Short term stuff. That’s it Okay, you’re taking a look at lending the US government money. You’ve got a Federal Reserve that again No one knows what they’re doing No one knows that what their formula is what they’re paying attention to it that they’re making it up as I go along It’s almost like playing roulette
That puts you in a very, very risky situation. Again, this is to me, it’s it’s malpractice, quite frankly. Malpractice for your advisor to overweight your portfolio with bonds was just ridiculous. And again, I’m shocked at the numbers here and how people’s portfolios.
our structure. Now, again, you also have a lot of weak minded advisors out there, fearful advisors. They just go along with the flow and say, whoa, okay, you’re this old and you want to retire in X amount of years. And they go to their little handy dandy financial advisor playbook and say, if I put this type of asset allocation in there, I’m never going to get myself in any trouble because everyone else is doing it. And that’s again, there’s a lot of a lot of sheep.
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out there when it comes to financial advisors. They all do the same exact thing. Same exact thing. Same, yeah, they might differ a little bit in the bonds that they’re buying, but the percentages are the same because they feel safe. And that’s why you’re getting substandard returns. That’s why your portfolios can’t keep up. I time, you actually work with someone that has somewhat a bit of intelligence that can see through this nonsense. Who in the world is buying?
I mean, you got to be out of your mind based upon what has been taking place in this country to allocate assets in that fashion. Watch Dog on wallstreet.com.
