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The Dangers of Putting Your Retirement on Autopilot

As pensions go the way of the dinosaur, it’s up to you to make your golden years shine. Yet many Americans put their investments on autopilot without thinking about the long-term effects it can have on their nest egg. Consider this: More than half of DIY investors set it and forget it without even bothering to do a performance check.

If you really want to live and give like no one else when you retire, it’s important to understand the dangers of taking your hands off the wheel.

Danger #1: Flying Solo

These days you can’t throw a rock without hitting the latest DIY craze. We live in a world of Pinterest and HGTV where even Vanilla Ice has skin in the game. If you don’t have sweat on your brow and dust down to your knees, you’re not doing it right!

And yet, DIY isn’t always what it’s cracked up to be.

During the Great Recession, headlines put financial fraud and failing banks at the forefront, and investor trust suffered a big blow. DIY investing became the natural choice for people who wanted total control of their nest egg. Today, studies show that nearly two-thirds of investors manage their own retirement funds.

But here’s the irony: Most folks who invest on their own aren’t actively invested in their own future. According to Fidelity, 54% of DIY investors simply let their nest egg sit and gather dust. Where’s the DIY brawn in that?

When you go it alone, it’s far too easy to let your retirement savings take a back seat to life’s more pressing priorities. That is, of course, until the latest news story causes you to jump in as the market peaks or bail out at rock bottom. These emotional decisions can knock big percentage points off your returns and put a dent in your savings plan. DIY investing may be cheaper at first, but it will cost you more in the long run—and that’s when your nest egg really counts!

Danger #2: Flying Blind

Working with an expert is a smart way to plan your future, but it’s not a free pass to fall asleep at the wheel! There’s danger at that end of the spectrum too.

Many investors are on information overload and don’t feel confident in their ability to make wise retirement decisions. So what do they do? Put a pro in the pilot’s seat instead. A recent study by J.P. Morgan found that half of workers wish they could just push an easy button and let a professional do all of their retirement planning and investing. Yikes!

Keep in mind you don’t have to give a pro complete control to fall into the blind-trust trap. Maybe you jump when your financial advisor says, “Go!” without asking any questions. Or perhaps you take a one-and-done approach to retirement advice because you don’t have time for regular check-ups. Either way, they’re both just degrees of disengagement.

No matter how nice or smart your financial advisor is, you still have to bring your brain to the table. Save the blind trust for your next team-building activity and treat your nest egg like your life depends on it—because it does!

Take Control of Your Future

Life is busy. It’s easy to let your investments be out of sight and out of mind. But don’t miss out on opportunities to make the most of your retirement dollars! If your nest egg has gone rogue, it’s never too late to get it back on course. Here’s how:

—Talk to an advisor to see whether you’re on track to reach your retirement goals. It doesn’t cost a thing to sit down and discuss your options. And don’t worry: Working with a financial advisor doesn’t mean you have to give up your independence. A true pro knows you call the shots and gives you final say over your future. Even Dave—a seasoned investor—knows the value of an experienced pro when it comes to growing his investments.

—Never invest in anything you don’t understand. No one cares about your future more than you, so take ownership of your investment decisions. If your advisor recommends something you don’t understand, ask questions and do some research on your own. An advisor who pressures you to invest in certain funds doesn’t have your best interests in mind. Look for a pro who takes time to explain all of your options in simple terms so you can make the choice that’s right for you.

money bag

Market chaos, inflation, your future—work with a pro to navigate this stuff.

Looking for an investing pro you can trust? We can put you in touch with a financial advisor Dave recommends in your area.

This article provides general guidelines about investing topics. Your situation may be unique. If you have questions, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros. 

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About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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