(RepublicanJournal.org) – Some Americans spend a majority of their lives saving money so that when the time comes to retire, they can do so comfortably. Many opt to put funds into a 401(k) account, where firms invest and hopefully grow the person’s retirement savings over time. President Biden announced a new rule in November that could put those accounts at risk.
STEPHEN MOORE: Biden Is Putting Americans’ Retirement Savings In The Crosshairs. Here’s How | The Daily Caller https://t.co/V5hU3iR4bx
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The White House is pushing to allow retirement managing firms to pick the companies they put stock in according to their stances on environmental and social issues. The strategy is called environmental, social, and governance (ESG) investing. To put it in layman’s terms, brokers will now be able to use the retirement funds of Americans as a way to coerce businesses into reducing their carbon footprints and conforming to social justice norms.
One example of ESG investing, and the havoc it can wreak on retirement accounts, came in the form of brokers divesting from big oil or gas companies in an effort to reduce greenhouse gas emissions. Account managers moved the money from businesses like Chevron and Exxon. Both companies had some of the highest performing stocks of 2022. Meanwhile, Americans going through certain retirement firms like BlackRock didn’t benefit from the surge. Instead, their accounts suffered at the hands of their managers.
Investing on behalf of one’s beliefs has been around for decades, but it becomes an entirely different matter when retirement firms, not the investors themselves, are deciding what to do with the money. Biden’s new rule could have a seriously negative impact on the retirement dreams of millions of Americans — all in the name of social and environmental justice.
Evidence of the damage ESG investing can do to retirement accounts came when Terrence Keeley, a former BlackRock executive, exposed some vital numbers. He found investors only enjoyed a 6.3% return, while the stock market overall was seeing 8.9% returns since 2017. Americans lost on average 2.6% per year on their retirement savings. It may not seem like much, but it all adds up and dampens a person’s chances of retiring the way they want to.
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