Suze Orman new book? Yep! She has been a source of reliable financial advice for 25 years. Her best-selling book You’ve Earned It, Don’t Lose It has sold over three million copies. The Suze Orman Show was a hit that ran on CNBC for 13 years. And, now it looks like she has another blockbuster on her hands.
She famously says people shouldn’t retire until they’re 70, and at 68 she is clearly following her own advice.
When she moved to the Bahamas in 2015, it seemed like she was winding down her work obligations and setting up a glide path to the post-work life. However, she has just published a new book, Orman has been back in the public eye giving savers and prospective retirees of all ages fresh advice on general retirement topics and how to handle the frightening prospect of losing a large chunk of their nest egg for the second time in eleven years — first in the global financial crisis and now due to the pandemic.
Here are some of the most relevant tidbits for retirement planning from the Suze Orman new book:
The period from roughly 1950 to 2000 was a golden age for savers and investors. During that half-century, the real total return for the S&P 500 was almost 50-fold. Things went up and up. However, since 2000, the stock market has bounced from bubble to bust multiple times, and incomes have lagged for everyone but the wealthiest.
Unfortunately, too many retirees are still focused on the upside potential that stock market investing can offer and there is not enough focus on risks and retirement income needs.
Orman argues in a recent blog post, Being Prepared for the Next Time:
“This is an opportunity to rethink your crisis expectations. Expect them to happen. Not ‘if’ they will happen, but ‘when’ they will happen.”
This pandemic is not going to be the last crisis to handicap the stock market.
It’s important to keep in mind that in a post-crisis world like the one we’ve been living in for the last twelve years, some expectations will have to be reset. You can’t anticipate the details of future crises, but you can bet they will happen. Make investigating hypotheticals and trying out different scenarios a part of your financial hygiene plan,
The age-old advice “hope for the best, plan for the worst” is still a great place to start when re-evaluating your retirement plan. The stock market will probably almost always regain losses, but that doesn’t matter if it is down when you need to withdraw and spend the money you have invested.
Ready to plan for the worst? Explore:
Ask most money managers if you should keep a sizable amount of your assets in cash, and they’ll tell you you’ll be putting yourself behind in the yield game. But Orman says now more than ever it’s important to have an emergency fund.
And, she doesn’t recommend the commonly prescribed three months. She says you should have eight months worth of living expenses in reserve.
“When things are going great, people tell me I am being too cautious. Eight months! Everyone else says three months is fine.… And then times like today arrive, and suddenly no one is arguing with me.”
That’s not to say you should liquidate losing positions in your stock portfolio in a mad dash for cash. Unless you have no other options to pay bills right now, you should put your losing stocks in a vault and throw away the key. Acting out of fear and selling stocks now is a sure way to turn a temporary loss into a permanent one.
An emergency fund is a cash cushion that you grow periodically (bi-weekly or monthly) out of your cash income every month rain or shine until a real emergency comes around. (You will recognize a real emergency because it will leave you no other choice but to spend that money. Coffee at Starbucks versus coffee at home is a choice. Not eating is not a choice.)
Need emergency cash? Here are 11 of the best and worst sources of emergency cash.
Orman writes in the first chapter of her book:
“I have plenty of expertise in the psychological and emotional tugs that take hold as we age, and I have empathy in spades — for your hopes, your fears, and your wishes for the generations ahead of you and the loved ones in step beside you. The advice I have to share in this book comes from a heart that knows money decisions are never just about money. “
You can’t rewrite history, undo the past, or predict the future. But in terms of your money, you do have total control over how you will live right here, right now. There is so much you can do — and must do — before you actually retire that will help you realize the life you want to live in retirement. For those of you who are already retired, there is always the opportunity to reconsider and refocus your plans to make it work even better for the years ahead.
Orman, like us at Boldin, believes that a secure and happy retirement is possible for almost anyone. It is just a matter of finding the right levers, getting detailed and prioritizing what you really want and following your plan.
The Boldin Retirement Planner allows you to create a truly comprehensive plan and try myriad scenarios that follow the six chapters in the Suze Orman new book (and more):
Creating a comprehensive plan is the first step. By getting detailed, you can find your own ultimate retirement. Take action now. Boldin makes it easy to get started.
The Boldin Budgeter let’s you think through what you may need (or want) to spend on children, aging parents and other family members or friends.
Retirement is not necessarily the end of work. You may go part time or find a retirement job that is more play than work. The Boldin Retirement Planner lets you set different levels of work income for different time periods.
Your home is likely your most valuable asset. The Boldin Retirement Planner enables you to try different scenarios like downsizing, living abroad, owning investment property and much more.
Not reading the Suze Orman new book? Explore this countdown to retirement checklist or these 12 tips for when you are 5-10 years from retirement.
The Boldin Retirement Planner will show your potential out of money age and how that changes with each data element you change. And, the system shows you your cash flow and has really detailed charts outlining your retirement income and potential sources of risk.
The Boldin Retirement Planner does not rely on preset formulas. You get to input a strategy and see what will give you the most secure future.
Figuring out who to trust is challenging. That is why Boldin offers in house fiduciary advice, working off of the plan that you yourself control. The Boldin Advisor can help you feel great that you are on the right track.
Out of pocket medical costs, long term care and your estate are critical aspects of any good retirement plan. The Boldin Retirement Planner offers a detailed exploration of these topics.
Get more advice from these famous investors: The Best Retirement Planning Advice from Buffet, Orman, Ramsey and 8 Other Financial Gurus.
