Chapter 1There’s Hope

In a perfect world, the value of our retirement savings would climb every year from the time we put the money in until we finally decided to use the funds to pay for the retirement of our dreams. We would never suffer a financial crisis caused by divorce or illness. And we would never find ourselves suddenly unemployed or the victims of the plummeting stock market, like the one we experienced in 2008. The value of our retirement accounts would only go in one direction: up.

In the perfect world, a mix of investments—say 65% stocks, 25% bonds, and 10% cash,1 a combination that represents a diversified, fairly safe portfolio—would earn 8% a year, every year, as it has on average since the 1920s.

1 Obviously, when it comes ...

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