Quick Read Dave Ramsey says personal finance is 80% behavior, and near-retirees face the steepest costs. A single panic sale can leave an investor $110,000 behind. Workers aged 60 to 63 can contribute up to $35,750 to a 401(k) in 2026, but about 40% of participants contribute less than 5% of their income. Holding one
Quick Read
Dave Ramsey says personal finance is 80% behavior, and near-retirees face the steepest costs. A single panic sale can leave an investor $110,000 behind.
Workers aged 60 to 63 can contribute up to $35,750 to a 401(k) in 2026, but about 40% of participants contribute less than 5% of their income.
Holding one to two years of spending in cash prevents forced stock sales during downturns, a strategy worth noting given that hardship withdrawals in 2025 ran 365% above their five-year average.
Building a portfolio and living off one are two completely different skills, and almost nobody teaches the second. This problem is what The Definitive Guide to Retirement Income helps, and it is free today. Read more here. (Sponsor)
On an October 16, 2026 episode of The Ramsey Show, a caller was struggling to stay motivated. Dave Ramsey answered with a short formula: “Personal finance is 80% behavior. It’s only 20% head knowledge.”
Pixel-Shot / Shutterstock.com
If you’re within ten years of retirement, that ratio comes with a price tag, and one panicked sale in a bear market can wipe out years of careful saving. So can one year of skipped catch-up contributions, or one new car loan.
Ramsey Has It Right, and Retirees Have the Most to Lose
Ramsey’s split holds up, and close to retirement it may even understate the case. A behavior mistake costs more as your balance grows, and balances usually peak in your late 50s and 60s. Federal Reserve data show households aged 55 to 69 hold 41% of U.S. household net worth. They also hold about half of all defined contribution retirement assets.
People also tend to overestimate what they know. The FINRA Foundation’s latest National Financial Capability Study found 64% of adults give themselves high marks for financial knowledge. Scores on its literacy quiz are low. Feeling informed does little to stop a bad decision made under stress.
What One Panicked Sale Costs
Picture a hypothetical 62-year-old with $500,000 in a portfolio heavy on stocks.
——
Now Available: The Definitive Guide to Retirement Income
Many successful investors eventually reach the same moment. The saving is done, the portfolio is built, and the question quietly changes from how much can I grow this to how much can I take out? Get that second question wrong and decades of good investing can come apart in a handful of years.
That is exactly what The Definitive Guide to Retirement Income helps answer. It covers what your retirement could actually cost, which income sources are worth using, and the withdrawal math that decides whether the money lasts. It is free today from Fisher Investments. Read More Here ›
——
A bear market cuts it 25%, to $375,000. Getting back to the starting balance takes a 33% gain from the bottom. That math is why a drop feels permanent while you’re living through it.
Investor A holds. In this example, the market recovers within a year, and the account is back to $500,000. Investor B sells at the bottom and keeps the money in cash earning 4%. A year later, B has $390,000. Both knew the textbook answer. The one who acted on fear is $110,000 behind, and that missing money stops compounding for the rest of retirement.
Follow-Through Is Worth Five Figures
The 2026 rules let workers aged 60 to 63 add a “super” catch-up of $11,250 on top of the $24,500 standard limit.
That brings the total to $35,750. In Dave Ramsey’s terms, knowing that limit exists is the 20%. Raising your contribution rate every January for four straight years is Dave Ramsey’s 80%.
Someone adding that extra catch-up at ages 60 through 63 puts in $45,000.
At an assumed 6% annual return until age 67, it grows to about $59,000. Most savers never get close.
A 2025 PLANSPONSOR survey found about 40% of participants put in less than 5% of income. Nearly as many kept their plan’s default rate.
Your Cash Buffer Decides Whether Discipline Survives
The biggest factor in a downturn is how much cash you’ve set aside for near-term spending. Staying disciplined is easy when nothing forces your hand, but it breaks down when bills come due, and your only money sits in stocks that just fell.
Go back to the $500,000 retiree, who now withdraws $40,000 a year. That retiree pays the bills from cash. With one to two years of spending set aside in cash, the stocks are left alone to recover.
Without a buffer, the retiree has to sell that much stock at the $375,000 bottom. After the recovery, those shares would have been worth about $13,000 more.
Borrowing from your retirement account is the other way out, and plenty of people take it. FINRA found 12% of non-retired respondents with retirement accounts took a loan from the account in the past year. Another 11% took a hardship withdrawal. Paychex data show hardship withdrawals in 2025 ran 365% above their five-year average.
Four Moves to Make Before Your Next Paycheck
Write down your spending number. Add up your fixed bills, then add a realistic monthly amount for everything else. Check that total against what your portfolio and Social Security can cover. The average retired worker’s benefit is $2,071 a month after the 2026 cost-of-living raise.
Fund the buffer. Make it your first priority. Move one to two years of planned withdrawals into a high-yield savings account or short-term Treasuries. That way, a bear market never forces you to sell.
Put your catch-up on autopilot. Set your 401(k) contributions to the 2026 maximum for your age. If your 2025 Social Security wages (Box 3 on your W-2) were above $150,000, your catch-up money has to go into a Roth account. On the full super catch-up, a 62-year-old in the 24% bracket gives up about $2,700 of upfront tax savings. Plan for a smaller paycheck.
Set rules. Plan for downturns and debt. Write down what you’ll do when stocks fall sharply: spend from cash, rebalance, sell nothing out of fear. Add a rule that you won’t sign any new loan without waiting a weekend first.
What protects your retirement is doing the right moves when it’s hardest.
Released: The Definitive Guide to Retirement Income
(Sponsor) Most people spend their entire working lives focusing on one thing: growing a pile of money. Then they retire and discover the skill they actually need is close to the opposite. Turning that pile into steady income, year after year, through good markets and bad, without ever running out.
It may be the least discussed and most consequential transition in personal finance, and plenty of otherwise careful investors walk into it with no real plan. That is exactly what The Definitive Guide to Retirement Income helps answer. It is a free guide from Fisher Investments covering what your retirement will really cost, where the cash flow should come from, and how much you can safely withdraw each year. Learn more here. Learn More Here ›
Pleskmedia Media Is a Global News Platform Covering the Latest Developments and Breaking Stories from Around The World, Including World News, Business, Finance, Technology, Health, Politics, Science, Entertainment, Sports, and More.
