Is Your Retirement Plan Broken? Suze Orman Has Advice on How To Fix It
Written by
Laura Bogart
Edited by
Kristen Mae
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You don’t need a crystal ball to tell you when you can retire — though sometimes it seems like the easiest way to know whether your retirement plan will work out. You may sense your plan has some flaws, but you’re not exactly sure what they are or how to fix them. So what do you do?
Turning to an expert like Suze Orman is a great place to start. Every day, people just like you read Orman’s best-selling books, listen to her podcast and watch her show to hear her opinions on retirement planning — including the missteps that could cost you. Orman has identified several telltale signs your retirement plan might be showing cracks — and, fortunately, she also offers tips to fix them.
You’re Planning To Retire Too Early
Sure, early retirement sounds delightful. Who wouldn’t want to spend extra years away from the hassles of work life? Orman understands the sentiment, but she’s very clear: Basing your entire retirement strategy on retiring as early as possible is a major mistake.
When asked about the Financial Independence, Retire Early (FIRE) movement, she was blunt, saying she “hated it.” Hate is a strong word, but Orman has real concerns that people underestimate both how long they’ll live in retirement and how much money they’ll need. It takes a long time to pad a nest egg — and you want yours sturdy enough to handle a sudden financial blow.
If your early retirement plan hinges on claiming Social Security at age 62, Orman wants you to slow down. Doing so will permanently reduce your monthly payments — and you’ll still be about five years away from full retirement age, which is 66 or 67 depending on your birth year.
In an interview with Kiplinger, Orman broke it down: “[By claiming early,] you’re passing up an 8% increase each year in your Social Security from your full retirement age all the way to 70.”
How To Fix It: Delay Retirement as Long as You Can
Orman understands that sometimes external factors — such as layoffs or illness — may force you into early retirement. But if you can delay until around age 70, you could maximize your Social Security benefits while giving your other retirement accounts time to grow. You’ll also be able to put your salary toward other financial goals, such as building an emergency fund, paying off your house or eliminating credit card debt.
On her website, Orman encourages using that extra time in the workforce to prepare for curveballs that could jeopardize your retirement:
“Now is when you still have some time to plan for the unexpected,” she wrote. “You can’t control if you are downsized next year, or if you have a serious illness three years from now. But you can commit to finding a way to save more now, to give you flexibility if the unexpected becomes your reality.”
You’re Not Factoring in Health Care Costs
In an ideal world, you’d remain healthy and active well into your retirement years. But that’s not always the case. If you’ve built your retirement plan assuming you won’t need significant health care services, you’ve left yourself vulnerable to a major financial hit.
According to Orman, many people simply assume Medicare will cover most major health care costs. But many are blindsided by the out-of-pocket expenses or coverage gaps they’re required to pay.
Breaking it down, Orman wrote:
“In 2025, the Part A inpatient hospital deductible is $1,676 and covers an enrollee’s out-of-pocket cost for the first 60 days of covered care. Anyone who remains hospitalized after 60 days, and up to 90 days, will then pay a daily co-insurance amount of $419.”
It’s more fun to budget for travel or dining out in retirement, but skipping health care planning could be a costly mistake.
How To Fix It: Understand the Costs and Get Supplemental Coverage
Understanding Medicare and other insurance isn’t easy. That’s why Orman offers a breakdown of the costs associated with Medicare — to help you better prepare for the so-called “unexpected.” At a minimum, know that Original Medicare (Parts A and B) doesn’t cover dental, vision or hearing care.
These three areas are particularly important for older adults, so Orman suggests getting a Medigap policy to help cover the costs:
“For those of you enrolled in Original Medicare (not Medicare Advantage), I strongly recommend you also pay for a supplemental Medigap insurance plan,” she wrote. “For Original Medicare enrollees, the government only pays 80% of Part B costs. A Medigap policy will help cover the 20% of costs you are responsible for.”
You can also defray some of these costs even before you retire by opening a health savings account or setting up a dedicated health emergency fund. In general, Orman advises planning your retirement as if you’ll live well into your 90s — which could also mean getting long-term care insurance.
You’re Relying Entirely on the Market
The 401(k) and traditional and Roth IRAs are considered retirement staples for good reason. Orman is a big fan of Roth retirement accounts in particular. However, if your entire retirement strategy is bound up in market-based accounts, that could be risky.
On her podcast, Orman warned that these accounts are subject to market volatility:
“It’s not always that stocks go down and bonds go up, or bonds go down and therefore stocks go up. Sometimes everything can go down,” she said.
How To Fix It: Have Cash Reserves Ready
To weather potential market downturns, Orman recommends keeping at least three to five years’ worth of living expenses in cash — such as a high-yield savings account, checking account or other liquid assets.
This ensures that, no matter what happens with the market, you can still cover essential expenses without needing to sell off investments at a loss. Even when the market is doing well, knowing you’re financially prepared provides peace of mind — something truly valuable in retirement.
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