Suze Orman’s 5 main rules to avoid going totally broke in retirement
Everyone hopes that, after decades of hard work, they’ll retire rich enough to spend decades more enjoying the fruits of their labor.
But if you ask financial guru Suze Orman, the average American is nowhere near ready. Their savings won’t last decades — they’ll last about three years.
Northwestern Mutual’s latest study shows that average retirement savings jumped 13% in 2021 to a range of $87,500 to $98,800. Despite the uptick in savings, the reality is that seniors 65 and older spend an average of $46,000 a year, the Bureau of Labor Statistics says.
If you want more than three good years, Orman’s book The Ultimate Retirement Guide for 50+ offers five key moves you can make today to set yourself up for a happy retirement. Here’s how to get started.
Take a hard look at your finances
If you haven’t already, Orman says it’s time to buckle down and take a deep look through your budget.
Compare what you’re spending to what you’re saving. Trim the fat where you can and cut back on any unnecessary spending so you can allocate more to your retirement savings column.
Do you own a home and are you planning to stay in it through retirement? Then Orman says you need to come up with a plan now to ensure you’ll have your mortgage fully paid off before you retire.
Downsize your home
You may have plenty of sentimental reasons to want to stay in your current home, but if it’s more space than you need and you can make money off of it, you may want to consider selling now.
Not waiting until you have to sell the house makes sense, Orman says, because if you invest the profits now, you’ll accrue much more interest than if you waited another 10 or 15 years.
“I don’t want you to wait till you’re 60 or 70 to sell this home,” she says. “I want you to downsize right now, so that you can start saving more money right now.”
Beef up your emergency fund
Financial experts typically recommend you have an emergency fund of at least three to six months’ worth of living expenses, Orman actually recommends you make that two or three years.
Yes, three years’ worth of expenses in an emergency fund. Her reasoning is that if the market ever takes a downturn, you’re not going to want to be withdrawing from your retirement accounts until it …….
Source: https://finance.yahoo.com/news/suze-ormans-5-rules-avoid-170500466.html