AMAC Exclusive – By Claire Brighn
Amid widespread economic turmoil last year, and with little wiggle room in monthly budgets, many seniors visited food banks for the first time, found inflation fees tacked onto their nursing home bills, and were even pushed to the brink of poverty. While a few policy changes will thankfully bring some relief, 2023 is still shaping up to be another tough year for seniors. Here are five things to keep an eye on in the months ahead.
1. Persistent Inflation
While inflation fell to 6.5% in December from a peak of over 9% in June 2022, it’s still well above the Fed’s target rate of 2%. Although the Biden administration is adamant that inflation will continue its downward trend, other economists and financial experts aren’t so sure. Famed investor Michael Burry said in January that another inflation spike is “almost certainly” in the cards for 2023.
Major Wall Street firms like Bank of America, Goldman Sachs, and Deutsche Bank have also forecasted higher prices and an economic slowdown in 2023. In a recent press conference, Fed Chair Jerome Powell has hedged his optimism regarding inflation predictions for this year, saying that “it will take substantially more evidence to give confidence that inflation is on a sustained downward path.”
With Biden stubbornly refusing to take any responsibility for inflation and doubling down on liberal big-spending policies, seniors living on fixed incomes may unfortunately once again be hard-hit by rising prices in the months ahead.
2. Looming Threat of Recession
Inflation isn’t the only economic threat that the Biden administration has repeatedly downplayed and ignored. Many experts are also predicting a deep and prolonged recession in 2023, a prospect that could be particularly worrisome for Americans approaching retirement age. Waves of layoffs that began in the tech and financial sectors are now beginning to spread to other areas of the economy. One in three companies reportedly say they plan on laying off 30% or more of their workforce in 2023.
However, the Biden administration appears content to wave away recessionary fears even with more interest rate hikes on the horizon. When the country entered a recession last year – defined as two consecutive quarters of negative economic growth – the White House and their media allies engaged in an all-out effort to redefine the term in order to avoid negative headlines. If that response is any indication, Americans shouldn’t expect much action at all from the administration if things indeed do get worse.
3. 2023’s Social Security COLA Still Not Enough to Offset Inflation
According to a recent analysis from the Senior Citizens League, the 5.9% cost of living adjustment (COLA) to Social Security fell short of inflation by an average of 46% per month in 2022 – resulting in many seniors falling behind financially.
News of an 8.7% COLA for payments beginning in 2023 was a welcome relief for Social Security recipients. But with how high inflation was last year and the prospect of higher inflation numbers in the months ahead, many seniors are likely left wondering if it will be even close to enough to bridge the gap.
At the very least, it doesn’t seem likely that the 8.7% increase will allow seniors to offset their losses from last year. Nonetheless, the Biden administration has touted the change as a “major victory” for seniors.
4. Biden Looks to Make Retirement Savings “Go Woke”
At the tail end of last year, Biden’s Labor Department issued an alarming rule stating that “fiduciaries may consider climate change and other environmental, social, and governance (ESG) factors when they make investment decisions.” By definition, “fiduciaries” investing money are supposed to act only in order to maximize returns on investment. However, studies show that “ESG funds certainly perform poorly in financial terms” – meaning the Biden administration sees no problem with putting woke ideology over the retirement investments of seniors. A number of Republican senators have already introduced a joint resolution condemning the rule.
5. Retirement Investments Face Another Tough Year
2022 was disastrous for retirement investments. 401k balances plummeted 23% year-over-year. According to one analysis released by the Federal Reserve Bank of St. Louis, “People between the ages of 55 and 74 lost, on average, over $100,000 in net worth due to falling asset returns between January and October 2022.”
As a result, many older Americans were forced to postpone their retirement plans or return to work just to make ends meet. With many economists predicting that a prolonged recession may be looming and stocks continuing to slide, seniors’ portfolios are likely in for another difficult year.
The new Republican House brings some hope that congressional conservatives can halt or reverse some of the disastrous policies that have devastated the financial lives of many seniors over the past two years. If President Biden has any aspirations of running for a second term and hanging on to the White House in 2024, it will require him working hard to make amends with older Americans, who at this moment are likely none too pleased with his tenure.
Claire Brighn is the pen name of a conservative researcher and writer with previous domestic and foreign policy experience in the Executive Branch.
