A financial literacy coach reveals the most common retirement investment blunder that's 'literally costing people millions of dollars'

• Finance TikToker Tori Dunlap shared a fundamental investing gaffe that's gone viral.

• Many people are not investing the money in their retirement accounts, resulting in "financial purgatory," she said.

• It's "literally costing people millions," she said, and commenters are reacting and realizing their oversights.

A clip from a podcast in which finance coach Tori Dunlap shared one of the most common investing mistakes people make with their retirement accounts is sparking shock and commiseration on TikTok.

In March, Dunlap appeared on the "Growing Up With Devon" podcast, billed as an "adulthood survival guide" hosted by Devon Werkheiser, the former child star who played the titular role in Nickelodeon's "Ned's Declassified School Survival Guide."

During her appearance, Dunlap — a self-described "financial feminist" who furnishes money advice aimed at young women — described a "very specific mistake" around Roth IRAs and other retirement accounts that she sees workers make.

Dunlap told Insider it's an especially common mistake that she sees women make.

"It's not like a bank account where you can put money in and be like, 'Cool, I'm done'," Dunlap said in the clip, which has been viewed 4.4 million times. "You have to not only put money into the account, but you then need to go and buy things with the money."

When people put money into a Roth IRA and then fail to invest those funds (like into an index fund, stock, or bond) the money remains in "financial purgatory," she explained. And it's an oversight that she said can cost people millions of dollars.

Dunlap told Insider that she met a 70-year-old woman named Rose who told her she had put her hard-earned money in a retirement fund for decades that never accrued.

"This is a problem I see all the time, especially with women," she said. "Rose was a teacher, diligently saving for her retirement for over 30 years, putting away every hard-earned penny she could. Except for one problem: Rose had never actually invested that money."

Many commenters chimed in that they, too, were unaware of how Roth IRAs functioned, thus proving Dunlap's point.

"Thank God I learned square dancing in school instead of this," one wrote. Another quipped, "I know some of these words."

Others said they thought putting money into the fund was all they needed to do. "I totally thought a Roth IRA did the work for you lol I def need a financial person," another commenter said.

Some bemoaned the fact that they had only recently become aware of how to invest their Roth IRA funds. "I've worked in corporate for 7 years and I JUST learned this," one wrote. Another added: "I went so long not knowing this it's insane."

Read the original article on Insider