{"id":2743,"date":"2016-03-04T18:23:40","date_gmt":"2016-03-04T18:23:40","guid":{"rendered":"http:\/\/healthyaging.net\/magazine\/?p=2743"},"modified":"2016-04-07T12:46:39","modified_gmt":"2016-04-07T12:46:39","slug":"why-people-retire-broke","status":"publish","type":"post","link":"https:\/\/healthyaging.net\/magazine\/winter-2016\/why-people-retire-broke\/","title":{"rendered":"Why People Retire Broke"},"content":{"rendered":"

\"chris-hogan\"By Chris Hogan<\/em><\/p>\n

D<\/span>ave Ramsey likes to say that personal finance is only 20 percent head knowledge and 80 percent behavior. That\u2019s definitely true of retirement, too. I could go on and on about investing strategies, mutual funds, IRAs, Roth 401(k)s and a thousand other things, but you could still retire flat broke. People generally don\u2019t enter retirement with no savings because their plan didn\u2019t work; they retire broke because they didn\u2019t have a plan in the first place!<\/p>\n

I\u2019ve watched far too many of my clients walk themselves off a financial cliff, because they thought they just needed facts. The truth is that facts only get you 20 percent of the way there. If you want to win at the retirement game, you\u2019ve got to take control of the behaviors that might keep you from investing. So, with that in mind, let\u2019s take a look at some of the top reasons why people hit retirement with no money.<\/p>\n

Reason 1: They Didn\u2019t Invest<\/h4>\n

Once you get past all the excuses people make, the number-one reason people have no money when they arrive at retirement is because they refused to invest. Sometimes, it was because they had a low risk tolerance and were just scared. Sometimes, it was because they were confused and didn\u2019t know what to do. Sometimes, it was because they spent too much time watching cable news and got freaked out about interest rates and the ups and downs of the market.<\/p>\n

You see, the finance nerds of the world like to argue about the rate of return on money, and they are completely correct: Higher interest rates yield higher returns. No kidding! But here is the bottom line that you need to hear: 8 percent, 10 percent, 12 percent, and 15 percent of zero money invested is still zero! Market returns mean absolutely nothing to you if you don\u2019t invest.<\/p>\n

Reason 2: They Jumped Off<\/h4>\n

In 2008, when we had the big market dive, many people went back to the mentality of, \u201cSee, there it goes again. The market is just not something we can trust.\u201d They went through that first drop on the coaster and panicked. Remember, though, we looked at the stats that showed how the market actually recovered from this big dip. At the end of the day, all this attitude does is give people an excuse to not be intentional with investing. They just jumped off the coaster!<\/p>\n

But what I need to reiterate to you is that, when you ride that investment rollercoaster long term, you have to go in with eyes wide open and aware there will be ups and downs. The key is to keep your seatbelt on, keep your bottom in the seat, and hang on for the long haul. After all, the best part of a rollercoaster is usually the very end.<\/p>\n

But again, I have watched thousands of people get terrified when they see the ups and downs of the market and let the fear just overwhelm them. Fear is what keeps people from embracing their future. Fear is a lose-lose proposition. Instead of refusing to invest or refusing to stay in the game, I want you to refuse to lose. If you don\u2019t consistently invest over a long period of time, or if you jump in and out all the time, you probably won\u2019t make it to your high-definition retirement dream.<\/p>\n

Reason 3: They Made Stupid Decisions<\/h4>\n

I was newly married and my wife and I were both working. We were making good money, and I decided that I was going to dabble in some stocks. So, we put about $2,500 into some AOL shares. The next thing you know, we looked up and it had more than doubled. We were obviously excited about this, so we added some money to it, and I bought some more because I thought we were riding a wave that just wasn\u2019t going to run out. Before we knew it, we had $10,000 tied up in stock with that one company. Talk about undiversified! But we thought we were winning, so we kept piling on the stupid!<\/p>\n

Before long, there was a \u201clittle bit\u201d of a correction in the market, and the stock got a little shaky. You\u2019d think that would have been my cue to get out. Wrong! Instead of getting out, I decided to double down. You know what that ended up doing? It doubled my losses!<\/p>\n

The lesson here is that you are always one stupid decision away from wrecking your retirement dream. You will never be so successful, so wealthy that you can dive headfirst into stupidity. One bad risk on a single stock, one afternoon of day trading, one impulsive hour in the showroom of a luxury car dealership\u2014all it takes is one moment of letting your guard down to undo years of hard work. Always measure the longterm effects of these kinds of decisions, and keep your guard up against stupid!<\/p>\n

Slow and Steady Wins the Race<\/h4>\n

Investing over the long haul is hard. You have to be strong enough to weather the financial storms that pop up. It may take a while to see any real gains. There is no such thing as getting rich quickly. There is no magic formula for building wealth overnight. You know what the secret ingredient is for wealth building? Patience. Fear, anxiety, impulsiveness are the enemies of patience, and they\u2019ll all lead you into retirement broke. Don\u2019t let them! Keep your eye on the goal and keep moving toward your dream\u2014slow and steady.<\/p>\n

*An excerpt from Retire Inspired: It\u2019s Not an Age, It\u2019s a Financial Number<\/a> by Chris Hogan<\/em><\/h6>\n
About Chris Hogan:\u00a0<\/strong>A popular and dynamic speaker on the topics of personal finance, retirement and leadership, Chris Hogan<\/a><\/span>\u00a0helps people across the country develop successful strategies to manage their money, both in their homes and businesses. Hogan has served on Dave Ramsey<\/a>\u2019s team as a trusted financial coach and advisor. He is the author of, Retire Inspired: It\u2019s Not an Age, It\u2019s a Financial Number.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

3 reasons why people sabotage their retirement. Financial expert Chris Hogan shares his views.<\/p>\n","protected":false},"author":3,"featured_media":3239,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[47,49],"tags":[],"class_list":["post-2743","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-winter-2016","category-winter-2016-features"],"acf":[],"_links":{"self":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/2743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/comments?post=2743"}],"version-history":[{"count":14,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/2743\/revisions"}],"predecessor-version":[{"id":3532,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/posts\/2743\/revisions\/3532"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/media\/3239"}],"wp:attachment":[{"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/media?parent=2743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/categories?post=2743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/healthyaging.net\/magazine\/wp-json\/wp\/v2\/tags?post=2743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}