Anne Tergesen

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4,485 appearances 83 recordings 1 series first heard Jul 2017 last heard Feb 2025

Anne Tergesen’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Retirees Face Decline in Financial Wealth Due to Inflation · 16 May 2024 podcast

Generally, over time, wages keep pace with inflation. matched

So there is a bit of a lag because workers negotiate their raises annually. matched

It doesn't exactly keep up with inflation in real time, but over the long term, wages tend to keep up with inflation. matched

The impact of fixed rate mortgages is kind of interesting, which kind of stands to reason when you think about it. matched

But it's a bit of a silver lining scenario with inflation, which is that households that have fixed rate mortgages kind of benefit from inflation to the extent that they have debt. matched

So it's not just mortgages, but other kinds of debt too. matched

But for example, with a fixed rate mortgage, your payment will stay the same. matched

And the thinking is because wages rise with inflation over time, matched

the portion of your income that has to go to cover your debt becomes smaller over time. matched

What they found is that those people also have taken a bit of a hit due to inflation, that they also have increased the savings that they're tapping to better cope with higher prices, but they also are reducing or maybe even eliminating their savings. matched

And again, this isn't everybody, but this is a sizable percentage. matched

What the study specifically found was that between 2021 and 2023, about 40% of people who were close to retirement, meaning they're age 55 or older, matched

they saved less due to inflation. matched

And about 25% of those people said they also spent more from their savings. matched

The study looked at also the impact of inflation on the financial wealth of people who are both in retirement and near retirement. matched

And they looked under a variety of scenarios, but the most likely scenario, they're forecasting declines in wealth for people who are retired in the middle income area of about almost 15 percent. matched

And for people who are matched

you know, approaching retirement, the figure is more like a 12% decline. matched

So either way, it's a significant decline that they're predicting in wealth, which is really problematic for people who are either in retirement or on the cusp of retirement and need to rely on their financial wealth for years to come. matched

So that's sort of the overarching finding of this study. matched

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