I’m not cashing out and just washing my hands at 32,” Brackson says. “I’m not going to be out of the game forever. “But I'm probably going to be a little bit less aggressive,” she says. will enter a recession or bear market in the next 18 months-and when that happens, she’s hoping to buy the dip. She had a variable interest rate that started at 12.5% and shot up to 29%, which made the payments on her used Nissan too high.Īnd Brackson says that she’s not planning to stay out of the market forever. In addition to using the cash as an inflation cushion and looking to avoid losing money on the markets right now, Brackson also used some of it to pay off her car loan.
“I do still have the savings,” Brackson says, adding she tries to keep from taking too many withdrawals.
Year to date, the S&P 500 is down 16.24% as of Friday morning. “What I would have lost this past May was quadruple what the penalty was,” Brackson calculates. While financial experts would rush to argue that investing-especially money earmarked for future goals like retirement-is a long game and it’s best to stay the course through market dips, Brackson has no regrets. For now, all of that money is in savings, which is earning a “ridiculously low amount” of interest, she says. But she also decided to cash out the roughly $63,000 she had in her 401(k), taking a hit with withdrawal penalties. “I grew up in gambling towns and so it’s like, get out while the getting’s good.”īrackson arguably got lucky, pulling out of her crypto investments before the big crash this spring. I was making decent returns on it, but returns don’t always last forever,” Brackson says. “Watching crypto, I just felt it was overvalued. As of Friday morning, Bitcoin was down 34.96% year to date, while Ethereum’s value has plummeted 51.82%. When she cashed out in November 2021, her combined cryptocurrency balance was nearly $25,000. That’s why I also bought into Ethereum and Bitcoin.”Īn active investor, Brackson also had a small amount invested in altcoins like Dogecoin, but she says she invested only $20 here or there for fun. And she still feels behind-so the savings she has managed to accumulate is all the more precious to her. “I had a quite aggressive portfolio just because I’m 32 and don’t have a lot of savings,” Brackson says, adding she worried about taking a financial hit she couldn’t afford if she left her investments in the market.īecause Brackson was just entering the workforce at the start of the Great Recession, it took her longer to start saving and investing. Enough that she decided she needed cash on hand, rather than tied up in investments. In addition to soaring inflation, threats of a looming recession and continued food and supply shortages also have Brackson spooked. But she was laid off in 2020 and had to go freelance-she now brings in about $60,000 a year. Prior to the pandemic, Brackson was making six figures. “I make decent money, but I'm very uncomfortable,” she says.
And I don’t have any means to put the brakes on it,” Brackson says, adding that right now, her expenses outweigh her income. “If inflation wasn’t a factor, I wouldn’t be losing money. Earlier this week, Brackson says she paid $6.50 a gallon. Her energy bills, trash collection, water, and Wi-Fi have all dramatically increased over the past year. “There’s not an expense I had that hadn’t gone up,” Brackson, 32, tells Fortune. More than a third of Americans (36%) have reduced their savings and 21% cut back on their retirement contributions due to inflation, according to BMO Real Financial Progress Index results published at the end of May.Ĭalifornia-based web developer Kay Brackson decided to take things a step further, completely cashing out of her 401(k) and crypto investments late last year. That’s hitting a lot of Americans hard financially. Despite prices leveling off a bit in April, inflation made the largest 12-month jump in May since December 1981. The consumer price index (CPI)-which tracks a wide range of goods and services used by the average American including food, energy, and housing- jumped 8.6% over the past year, according to May data from the Bureau of Labor Statistics (BLS) published Friday. As inflation continues to hit everyday staples like food and gas prices, Americans are cutting back-even on their long-term investments and retirement savings.
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