Despite having saved $2 million, a couple in their fifties is still hesitant to retire due to fears of market crashes. Financial expert Dave Ramsey advises them to overcome their fears and invest in the stock market, as they could have potentially had $8 million if they had invested earlier.
The couple had kept all their money in cash, certificates of deposit, and bonds, which only provided small returns. Ramsey emphasizes that investing in the stock market through mutual funds can provide significant long-term growth, even if there are temporary market fluctuations.
Ramsey recommends various retirement savings options such as 401(k), Roth IRA, TSP, and pensions. He stresses that despite market volatility, historical data shows a positive return on stock market investments over the long term.
Even though the stock market can go up or down in any given year, history provides a guide to what it might do in the future. The S&P500, which indexes the stock performance of 500 of the largest companies listed on stock exchanges in the US, has returned a yearly average of around 10.26% since its inception in 1957. However, the rate of return any individual retirement portfolio will see also depends on the performance of its investments, which can include stocks, bonds, mutual funds, REITs, and more.
