- A 71-year-old woman revealed that she and her husband engaged in panic selling during the coronavirus pandemic after the market dropped.
- If the money was left alone, the woman’s savings would have been almost $400,000.
- Retirement can soon become a problematic issue for many Americans.
Volatility is an inherent part of stock markets. While protecting one's investment from losses is crucial, panic selling can lead to a greater setback in the long run, as a 71-year-old woman's case revealed.
Donna, who was participating in The Ramsey Show, revealed that she and her 84-year-old husband took out money from their retirement account during the coronavirus pandemic when they lost $26,000 in a week.
"So we took it out real quick. And our thought was that we don't have time to recover," she said.
The market recovered in 50 days, and Donna ended up missing out on three years of 25% gains, 24/7 Wall St. reported.
Later, after working up the courage to invest her money again, she and her husband engaged in panic selling once again.
Host Dave Ramsey did not hold back in telling Donna how she had made a mistake. “Your $200 would be $400 if you'd have left it alone," he said.
Since Donna's account had roughly $190,000 before the pandemic, if she had left her investment alone, the value of her investment would have been almost $400,000.
Ramsey also explained historical trends, adding that during recent crashes like COVID and the 2008 financial crisis, the markets recovered within a year.
How Much Money Do Americans Need To Retire?
A recent study found that Americans need $1.46 million to retire comfortably. The 2026 Planning & Progress Study from Northwestern Mutual revealed that the amount increased $200,000 compared to last year
The jump comes as 46% of Americans claim they don't expect to be financially prepared for retirement, as per the research. Almost half (48%) believe it is somewhat or very likely that they could outlive their savings.
Retirement could soon be a tricky question for Americans. Social Security recipients could face cuts of $500 on an average each month in 2032 if the program's fund runs out.
The average monthly benefit cuts would be over $500 in 29 states, as per a report by the Committee for a Responsible Federal Budget.
Not just that, financial literacy among Americans has fallen to a 10-year-low, a study by Stanford University's Global Financial Literacy Excellence Center and investment giant TIAA has found.
Questions linked to retirement were particularly difficult for many, with survey participants averaging about two correct answers out of six.
With the situation dire for many Americans, Donna's case illustrates how panic selling can worsen one's financial condition.
