Suze Orman’s 5 Rules for Avoiding Bankruptcy in Retirement
But if you ask finance guru Suze Orman, the average person will fall very, very small. Instead of lasting decades, their savings will last about three years. After decades of hard work, Americans hope to retire wealthy enough to enjoy their retirement more for decades to come.
If you want more than three good years, the Golden Book The Ultimate Retirement Guide for 50+ offers five essential rules for ensuring a comfortable retirement.
Right now, the median savings held in retirement accounts in the United States is only $ 65,000, according to a Federal Reserve study released in September 2020. Meanwhile, the government says that Households headed by people aged 65 or older spend an average of about $ 47,600 per year.
1. Take a close look at your finances
Rido / Shutterstock
If you haven’t already, Orman says it’s time to linger and take a deep dive into your budget.
Compare what you spend with what you save. Cut fat where you can and cut back on unnecessary spending so you can put more into your retirement savings column.
You don’t know how? Mortgage refinancing at today’s still historically low interest rates could save you hundreds of dollars a month and get you out of your mortgage faster.
Do you own a home and plan to stay there until retirement? Then Orman says you need to make a plan now to make sure your mortgage is fully paid off before you retire.
2. Reduce the size of your house
romakoma / Shutterstock
You can have many sentimental reasons for wanting to stay in your current home, but if there is more space than you need and you can make money from it, you may 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 earn a lot more interest than if you waited another 10 or 15 years.
“I don’t want you to wait until you are 60 or 70 to sell this house,” she says. “I want you to downsize now, so you can start saving more money now.”
The story continues
3. Build up your emergency fund
While some may be reluctant to part with their family home, a smaller space is easier to clean, cheaper to manage, cost you less in home insurance, and become more accessible with age.
Financial experts generally recommend that you have an emergency fund of at least three to six months of living expenses, Orman actually recommends that you do this for two or three years.
Ariya J / Shutterstock
News Business Highlights
- Suze Orman’s 5 Rules for Avoiding Bankruptcy in Retirement
- Check out all the news and articles for business news updates.