Stocks suffered one of the worst years ever and inflation soared
- Vanguard revealed its average customer 401(k) account balance was $112,572 at the end of last year – down one fifth on 2021
- But throughout 2022, 39 percent of customers increased their deferral rate – the amount of their paycheck which is moved into their 401(k) account
- Savings were battered as stocks plunged and inflation hit record highs
The average 401(k) balance plunged by 20 percent in 2022 despite many Americans increasing their contributions as stocks suffered one of the worst years ever.
A report by Vanguard, one of the world’s largest investment companies, reveals its average customer 401(k) account balance was $112,572 at the end of last year – down one fifth on 2021.
But throughout 2022, 39 percent of customers increased their deferral rate – the amount of their paycheck which is moved into their 401(k) account.
The contrast between rising contributions and falling balances lays bare the battering that markets took last year, amid a mixture of record inflation and big hikes in interest rates.
Dave Stinnett, head of strategic retirement consulting at Vanguard, said it was reassuring that savers remained committed to their accounts despite the economic challenges.
‘Despite economic headwinds, we were pleased to see that participant behavior in retirement plans remained in line with previous years, and most participants continued to maintain a long-term view,’ he said.
The main US stock indexes ended 2022 with their steepest annual losses since 2008 against the backdrop of the Fed’s fastest pace of rate hikes since the 1980s.
The benchmark S&P 500 shed 19.4 percent last year, marking a roughly $8 trillion decline in market cap, while the tech-heavy Nasdaq fell 33.1 percent.
STUDY: Natural Immunity From Infection As Protective As COVID-19 Vaccination
A new study published Thursday in The Lancet found that immunity granted by a COVID-19 infection is just as strong, if not more so, than the immunity provided by two doses of an mRNA vaccine against the virus.
Natural immunity from prior COVID-19 infection reduces the risk of hospitalization or death from the virus by 88%, researchers found. The study’s authors wrote that this level of protection was “at least as high, if not higher” than that of two mRNA vaccine doses.
“This is really good news, in the sense that protection against severe disease and death after infection is really quite sustained at 10 months,” Dr. Christopher Murray, the study’s senior author and director of the Institute for Health Metrics and Evaluation at the University of Washington, told NBC News.
Murray added that relying on natural immunity could still be perilous, though, because “you might be one of those people that end up in the hospital or die” on first infection.
The researchers conducted a meta-analysis of 65 studies across 19 countries, the biggest meta-analysis ever conducted on natural immunity from COVID-19. It compared individuals who had recovered from prior infections to those who had not yet been infected as of September, and excluded people who had both natural immunity and had been vaccinated.
The protection provided by natural immunity was shown to last as long as ten months. Natural immunity appeared to fade more slowly than the protection offered by vaccines.
Both Murray and Dr. Bob Wachter, chairman of the department of medicine at the University of California, San Francisco, told NBC News that policymakers should consider natural immunity moving forward when discussing things like vaccine mandates.