Suze Orman Says Your Retirement Isn’t Safe Until You’ve Done This

Core Insights - Financial expert Suze Orman provided a critical analysis of retirement readiness for a couple with nearly $1 million in net worth, revealing significant financial mismanagement that could jeopardize their retirement plans [1][2][3]. Financial Situation Analysis - The couple, Kathy and her husband, had a net worth of $970,833, including $675,000 in retirement accounts, which initially suggested they were prepared for early retirement [2]. - Their monthly expenses of $5,534 exceeded their take-home income of $5,239 by $295, indicating they were already living beyond their means while still employed [3]. Retirement Income Projections - Upon retirement at age 62, the husband would generate approximately $2,000 in after-tax income from retirement accounts, combined with the wife's $1,600 monthly income, totaling $3,600 [4]. - This income would leave a monthly shortfall of $2,000 against their expenses, highlighting a critical gap in their financial planning [4]. Expert Verdict - Orman assigned a failing grade to the couple's retirement plan, stating "The F stands for forget about it," indicating that their current financial strategy was unsustainable [5]. Essential Steps for Financial Security - Eliminate All Housing Debt: Orman emphasized that paying off their mortgage, which had 28 years remaining, should be the couple's top priority before retirement [6]. - Establish Proper Legal Protection: The couple needed essential estate planning documents, including a will, a trust, and adequate insurance coverage [7]. - Secure Long-Term Care Insurance: Orman highlighted the importance of long-term care insurance to protect against potentially devastating costs that could deplete retirement savings [8]. - Maintain Adequate Life Insurance: The couple was deemed underinsured, which posed another risk to their financial stability [9].