Latest Retirement Saving Trends 2022

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After two years of COVID-related financial difficulties, how are your retirement accounts looking? If you’re like many Americans, you may be researching some less traditional investment vehicles to diversify your portfolio in trying to mitigate uncertainty in the markets. As we move further into 2022, three investing trends first identified at the start of the pandemic are likely to continue. Below, M&R Capital Management relates some of the current news related to retirement investing.

In 2022, three trends are likely to dominate your retirement investments—a growing retirement savings gap, higher returns, and better financial wellness. After two financially rough years, it looks as if the ongoing pandemic will continue to affect the majority of Americans’ retirement investments. Follow these trends to stay ahead of the curve.

In this article, we’ll quickly explain the three major trends affecting retirement investments in 2022. Put this information to good use and shore up your financial commitments today.

Trend #1 – A Growing Retirement Savings Gap

A recent report published by American investment firm T. Rowe Price has found that the gap between the amount of money needed for retirement and the amount Americans have saved has grown wider and will continue to grow in the coming year. Currently, this gap has risen to around $4 trillion and will continue to grow in light of the ongoing economic fallout from the COVID pandemic.

This is also exacerbated by a general lack of access to defined contribution plans, including Roth IRAs and 401(k)s. According to their findings, 36% of Americans employed by private businesses still do not have access to ongoing retirement plans, preventing them from increasing their retirement investments. This was especially true for Americans employed by smaller businesses.

As adult lifespans are increasing at a faster rate than ever before, this growing gap puts pressure on many Americans who worry that they won’t have invested or saved enough money to cover the daily costs of retirement.

Trend #2 – Employee Wellness Equals Financial Wellness

Although the retirement savings gap is on course to widen, 2022 could mark a shift in financial wellness for many Americans. So far in 2022, there have been major tremors throughout the labor force, with many Americans quitting their jobs in favor of better hours, better pay, and better benefits.

This sudden exodus of skilled workers has forced many employers to offer better retirement packages. At the height of the pandemic, many Americans had to tap into their savings to cover daily expenses and, now that the pandemic is beginning to shift, most workers are looking for better conditions to make up for those losses.

Currently, it’s estimated that more employers will offer competitive benefits with financial wellness programs to bring in new hires. With better financial wellness, employees can then invest smarter.

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Trend #3 – Social Security Rises Up with Inflation

Although prices are on the rise through the US, retirees have reason to relax as their social security returns are expected to increase as well. According to a report released by the Social Security Administration, average payouts increased 6% at the start of the year, rising from $1,565 to $1,658.

However, this comes amid rampant inflation throughout the nation. It’s unclear whether Social Security will be able to keep up with rapidly rising prices so, for now, it’s best to shore up your finances and supplement federal payments with other investments.

Final Thoughts

Although the stock market continues to outperform itself, 2022 still looks to be a year of financial uncertainty for most Americans. Carefully watch your investments in the next few months and take care to avoid the rising costs for most consumer goods.

M and R Capital Management
M and R Capital Management

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