Suze Orman’s Biggest Shift: The Surprising Retirement Advice She’s Changed Her Mind About
Suze Orman has regularly shared “tough love” financial advice that focuses on avoiding debt, spending less than you earn and working until you turn 70. She has held firm to much of the financial advice that propelled her career in the 1990s, but she seems to have softened her stance on the need to work until age 70.
Here’s the advice she gives for people who are charting their path to retirement.
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The old rules
Orman previously advocated for not retiring before 70 in order to maximize Social Security. Not only does the extra income allow their savings to grow while they don’t have to tap retirement accounts to cover expenses, but the benefit will be higher the longer you delay your start date for Social Security.
Working for more years without having to touch your investments and savings gives your portfolio more time to compound. Working until you turn 70 still has merits, but it doesn’t make sense for everyone.
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Suze Orman's shift
It may be easy to think that you can work until you turn 70 when you are in your 20s. But there are many factors — burnout and health issues among them — that could have you second thinking that plan later in life. Working a job deep into your 60s may limit how much time you get to spend with your children and grandchildren, or keep you from your travel goals.
In response to the concern of not wanting to work until age 70, Orman’s blog now says “No one is saying you need to.” She adds that if you have other savings or income sources, such as from 401(k)s or individual retirement accounts (IRAs), it makes sense to tap those savings in your 60s if it helps you delay starting Social Security. This is called the “bridge strategy.” The blog post adds that she encourages someone in this position also to consider a part-time job instead of tapping Social Security early.
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The new retirement rules
Orman’s approach to retirement includes the following three rules:
1. Focus on retirement readiness
Orman emphasizes the importance of stress-testing your retirement plan so that you know that you’re financially ready to retire. This approach removes some of the focus on age 70 specifically.
Your savings, lifestyle expectations and current health influence when it’s the right time to retire. Relocating to a more affordable area or getting a part-time gig could allow you to leave your full-time job sooner.
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2. Have liquidity
Orman also emphasizes the importance of having access to cash in retirement. She recommends having between three and five years’ worth of living expenses saved up, though many financial advisors recommend closer to one to two years.
This financial buffer makes it easier to stay invested and not worry about any headlines during market volatility.
3. Find peace of mind
Orman’s focus on peace of mind has become a key part of her modern financial advice. She says to not just measures your wealth by how much money you have but also whether you have to worry about “what-ifs.” Working until an age that makes sense for your finances and having a cash buffer can help.