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Bidenomics and Its Impact on Retirement Accounts

Isaac Nuriani    |
Jan 12, 2024
  • Economist says Bidenomics has significantly diminished the real value of retirement accounts.
  • Seniors may have to accept a lower living standard in retirement.
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Bidenomics might have a number of fans at 1600 Pennsylvania Avenue. But among regular Americans? The data suggests, “Not so much.” 

Officials at the White House aren’t using the term as often as they once did. They seem to be concerned about evidence that it’s been landing with something of a dull thud lately. But they used it a bunch earlier in 2023.[1] 

There was Vice-President Kamala Harris’s straightforward declaration in August that “Bidenomics is working,” citing then-recent job-growth figures and the economy’s “strength” as proof.[2] And there was the president’s euphoric cheerleading for the term several weeks before, proclaiming, “Bidenomics is just another way of saying ‘restoring the American Dream.’”[3] 

It doesn’t seem like many “regular” people see it that way, however. A recent poll by the Financial Times found that just 14% of American voters believe they’re better off financially now than when President Biden first took office. The same poll found that 33% of voters think the president’s policies have “hurt the economy a lot.”[4] 

And that’s not the only poll indicating widespread dissatisfaction with the president’s oversight of the economy. Last month’s edition of the widely followed Monmouth University Poll found that only 31% of Americans approve of President Biden’s job performance, while 61% explicitly disapprove. Those are the worst numbers for Biden in Monmouth polling since he became president.[5] 

As for Biden’s handling of the economy, specifically, a whopping 68% of Monmouth Poll respondents said they disapprove of the way the president has dealt with inflation. Even 53% said they disapprove of the way he’s handled jobs and unemployment in spite of the fact that the government’s headline unemployment measure has been at or near 50-year lows for the last two years.[6]  More broadly, 44% of Americans reported having to struggle to stay where they are financially.[7]  

By a fairly significant margin, then, it seems Americans have an unfortunate opinion of their experience as consumers and working professionals plugging away in the economy managed by President Biden. 

That said, one thing we’ve not heard as much about is the impact of the Biden economy on retirement savings. Not because that impact isn’t potentially significant. But more likely because when people are focused on making it one week to the next, having enough mental energy left over to consider how one’s retirement plan might be faring seems almost a luxury. 

Except it isn’t merely a luxury consideration. Yes, people must focus on how to make ends meet before they can give much thought to optimizing their savings. But the fact remains that achieving personal economic security in time for one’s golden years is exceptionally important…and something that has to be addressed even as more urgent considerations might seem a greater priority in the moment.  

On that important note, one Ph.D. economist, E.J. Antoni, recently ventured a look at how the economy under President Biden has treated retirement plans. And his conclusion is that just as Bidenomics seems to have wreaked havoc on Americans at the elemental consumer level, so has it wreaked havoc on the 401(k)s and IRAs many of those same consumers are counting on to give them at least a few years of actual retirement before their time on earth reaches an absolute end. 

This week, we’re going to spend some time examining Dr. Antoni’s detailed analysis and associated conclusions. But that’s not all. As we close out, we’re also going to discuss why the retirement-savings issues raised by Antoni may, in fact, transcend Bidenomics itself. 

Economist: Real (Inflation-Adjusted) Value of Retirement Plans Has Dropped 25% Under Bidenomics 

According to Dr. Antoni’s analysis, the Biden economy has harmed retirement accounts in two substantial ways. 

The most direct and easily understood way is the stringent cycle of interest-rate hikes initiated by the Federal Reserve in March 2022 to bring down the inflation that began a year earlier. The discomfort that ensued in financial markets when it became clear rates were heading upward generated significant volatility that directly impacted the nominal value of retirement plans.[8] 

In just a moment, we’ll discuss that in a little greater detail. As for the other principal way the economy under Biden has dogged retirement accounts, Antoni suggests it’s by way of the inflation itself. In Antoni’s estimation, inflation during Biden’s tenure has negatively impacted retirement accounts by significantly diminishing the purchasing power of savings. 

In other words, Antoni contends that while higher interest rates have led to a decrease in the nominal value of retirement savings, the inflation that serves as the reason why rates were jacked up in the first place has done additional damage by diminishing the buying power of what’s left. 

And so, what has been the total damage to retirement accounts thus far in the Biden economy?  

We’ll get to that in a couple of minutes. First, let’s cover each of these specific “drags” on retirement-account performance, according to Dr. Antoni. 

Analysis Indicates Inflation and Higher Interest Rates Have Effectively Double-Teamed Retirement Accounts Over the Last 2½ Years 

Antoni begins his look at retirement plans – 401(k)s, specifically – in the first quarter of 2021, which is, of course, the first calendar quarter of President Biden’s tenure. At that time, there were roughly 60 million 401(k) plan participants whose account sizes averaged $133,800.[9] 

Fast-forward to the end of Q3 2023. According to Antoni’s research, the average 401(k) balance by then was $116,800 – a net decline of $17,000, or 12.7%, from the $133,800 average balance in Q1 2021. [10]  

But Dr. Antoni says that’s just half the story of how the Biden economy has compromised Americans’ retirement plans.  

“This is only the nominal loss and should be adjusted for inflation to determine the change in real value for the average 401(k) plan,” Antoni says. “Prices faced by retirees have increased sharply since the beginning of 2021, nearly in proportion to the price increases faced by the typical urban consumer across age groups.”[11]  

In fact, notes Antoni, the cumulative increase in prices from Q1 2021 through Q3 2023, was 16.1%.[12] Although the results of such analyses can differ depending on the calculation methods used, Dr. Antoni’s number seems generally consistent with other, similar assessments of inflation’s toll. For example, Bloomberg Economics recently determined that prices overall rose nearly 20% from 2020 – which was before the consumer price index even moved above 2% – through Q3 2023.[13] 

According to Antoni, the impact of 16.1% cumulative inflation from Q1 2021 through Q3 2023 compounded the impact of the nominal-value losses on 401(k)s generated by rate-hike-driven economic volatility. By how much? By another $16,200, according to the economist.[14] 

In other words, Dr. Antoni says the “real,” or inflation-adjusted, losses in a 401(k) of average account size from Q1 2021 through Q3 2023 amounted to $33,200, or 24.8%, decreasing its true value from $133,800 to $100,600.[15]   

A reduction in the real value of a retirement account from $133,800 to $100,600 over a period of 2½ years is a big deal. But a bigger deal is the real-value percentage reduction by nearly 25%, because it applies to accounts of all sizes. Which means accounts that may be considerably larger and belong to older Americans either on the doorstep of retirement or who already are retired have been impacted similarly and as significantly, according to Antoni. 

Let’s discuss that – as well as some broader implications – as we finish up this week.   

E.J. Antoni: Bidenomics May Force Seniors to Accept a Lower Standard of Living in Retirement 

In his report, E.J. Antoni makes clear what he thinks one of the most direct and impactful implications of these real-value account losses is, saying, “For a would-be retiree, losing almost one-quarter of his or her retirement savings in two and a half years likely necessitates delaying retirement.”[16] 

Clarifying his assertion, Antoni suggests that even those who aspire to cease working with an account value of $1 million and were approaching that figure at the time Biden assumed office now find themselves left with a real account value in the neighborhood of $750,000.[17] 

So how do they overcome that deficit? By continuing to work…perhaps up to a decade longer. But even that might not be enough. Antoni points out that the median income of Americans approaching retirement is not quite $62,000. Assuming both that income and the $1 million account-size goal, Antoni estimates the person fitting that profile would have to save roughly 30% of pre-tax income for a decade to reach their objective. For a lot of older Americans, the economist suggests, the combined burden resulting from saving that much and working that much longer may not be bearable.[18] 

So, what will they do instead?  

“It seems reasonable that some Americans nearing retirement will choose a lower standard of living than previously planned,” Antoni suggests, “instead of working for an additional decade to fully rebuild the real value of their IRAs.”[19] 

“A lower standard of living.” 

But while many observers – including E.J. Antoni, of course – seem justifiably critical of the Biden-run economy, I actually think the most important lesson of Antoni’s article is one that transcends Bidenomics altogether.  

At the outset of his analysis, Dr. Antoni lays much of the blame for higher inflation – as well as the higher interest rates deployed to chase that inflation down – at the feet of the excessive government spending that’s been racked up on Biden’s watch, spending so significant it demands massive levels of borrowing by the Treasury.[20] 

On that note, Antoni closes out his piece by saying, “The Biden administration should immediately begin working with Congress to reduce the federal budget and, thus, borrowing by the Treasury Department. Such reductions are necessary to relieve the upward pressure on both interest rates and inflation rates.”[21] 

Many observers would readily agree. But I think it’s important to note that massive levels of government spending – and the dual threats to household financial stability posed by the inflation and higher interest rates that often follow that spending – are not unique to the Biden administration.  

Yes, accumulating a $1.7 trillion deficit in fiscal-year 2023 – a year untouched by any of the kinds of acute crises that are viewed as defensible reasons for running up extraordinarily high deficits – was “special” in its own concerning way.[22] 

But broadly speaking, annual deficits have been on the upswing since the early 2000s, really taking off around the time of the financial crisis. And they haven’t looked back, soaring under both Republican and Democratic administrations.[23] 

What I’m getting at is this: Spending by the Biden administration – and the associated borrowing by the Treasury – may be especially reckless right now, but there are no signs the situation will improve meaningfully in the years to come, regardless of who’s in charge. Which means the economic and fiscal ills Dr. E.J. Antoni says have been so debilitating for retirement savers during the last couple of years may continue to be relevant to those same retirement savers even after President Biden is no longer in charge. 



[1] Megan Lebowitz, Ghael Fobes and Peter Nicholas, NBC News, “The word ‘Bidenomics’ is nowhere to be found in the president’s recent speeches” (November 29, 2023, accessed 1/11/24). 
[2] WhiteHouse.gov, “Remarks by Vice President Harris Highlighting the Impacts of Bidenomics and Announcing Increasing Support for Small Businesses” (August 4, 2023, accessed 1/11/24). 
[3] WhiteHouse.gov, “Bidenomics Is Working: The President’s Plan Grows the Economy from the Middle Out and Bottom Up—Not the Top Down” (June 28, 2023, accessed 1/11/24). 
[4] Lauren Fedor, Eva Xiao and Oliver Roeder, Financial Times, “Only 14% of US voters say Joe Biden has made them better off” (November 13, 2023, accessed 1/11/24). 
[5] Monmouth.edu, “President’s Rating Hits Record Low” (December 18, 2023, accessed 1/11/24). 
[6] Bureau of Labor Statistics, “Labor Force Statistics from the Current Population Survey” (accessed 1/11/24). 
[7] Monmouth.edu, “President’s Rating Hits Record Low.” 
[8] Hartford Funds, “10 Things You Should Know About Stock Market Volatility” (accessed 1/11/24). 
[9] E.J. Antoni, “Reexamining Bidenomics’ Impact on Americans’ Retirement Plans” (November 2023, accessed 1/11/24). 
[10] Ibid. 
[11] Ibid. 
[12] Ibid. 
[13] Reade Pickert and Jennah Haque, Bloomberg Economics, “Just How Bad Is the US Cost-of-Living Squeeze? We Did the Math” (November 27, 2023, accessed 1/11/24). 
[14] Antoni, “Reexamining Bidenomics’ Impact.”  
[15] Ibid. 
[16] Ibid. 
[17] Ibid. 
[18] Ibid. 
[19] Ibid. 
[20] Eric Wallerstein, Wall Street Journal, “Treasury Borrowed Over $1 Trillion in Q3; Another $776 Billion Expected in Q4” (October 30, 2023, accessed 1/11/24). 
[21] Antoni, “Rexamining Bidenomics’ Impact.” 
[22] FiscalData.Treasury.gov, “What is the national deficit?” (accessed 1/11/24); Jeff Stein, Washington Post, “U.S. deficit explodes even as economy grows” (September 3, 2023, accessed 1/11/24). 
[23] Kimberly Amadeo, The Balance, “US Budget Deficit by Year Compared to GDP, the National Debt, and Events” (April 5, 2022, accessed 1/11/24). 

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