For weeks, the stock market has fluctuated dramatically due to the debt ceiling stalemate. A default could send stocks into a free fall with a direct hit to retirement savings plans.
"If we are in default for a very long time, like some studies have been estimating, then yeah, a 45% drop in the stock market is entirely plausible," he said. Moller and his team estimate a default could cause the S&P 500 to drop about 22%, wiping out years of earned wealth for millions of households, particularly those nearing retirement.
Again, Moller says the financial pain depends on how long the U.S. is in default, adding that the current stalemate is economically damaging in its own right.
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