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Famed financial expert Suze Orman says $2 million just isn’t enough to retire early on.
In fact, as she explained on an Afford Anything podcast, you need “$20 (million), $30 (million), $50 (million) or 100 million dollars” to retire early, as quoted by AffordAnything.com . “Two million is nothing. It’s nothing. It’s pennies in today’s world, to tell you the truth.”
She also believes $10 million should be your minimum, which, to be honest, is easier said than done.
Key Points About This Article - If you’re thinking about retiring, make sure you have enough savings.
- According to Suze Orman, “you need “$20 (million), $30 (million), $50 (million)or 100 million dollars” to retire early.”
- Also: Take this quiz to see if you’re on track to retire (Sponsored)
Orman Isn’t a Big Fan of FIRE FIRE, or Financial Independence Retire Early emphasizes strict budgeting, saving, and investing so you can retire before the age of 65.
And while even the promise of leaving the workforce is certainly appealing for many of us, including myself, it’s not a safe move unless you’re swimming in money earlier than your retirement age.
“I hate it. I hate it. I hate it. I hate it,” Orman added.
Part of the reason for that is because of how unpredictable life is, in addition to potential negative changes in the economy. Plus, if you don’t have a significant amount of money. If you face catastrophe. What are you going to do, she asked.
By retiring early, you’re leaving money on the table Orman also argues that by retiring early, millions of people could miss out on the potential for compound interest.
"If you achieve financial independence, and you're no longer putting money into your retirement accounts, you are losing the compounding years of your life,” she added, as quoted by The Washington Post .
She also argues that younger people in their 20s, for example, really don’t understand the power of compound interest either. They also don't understand that compound interest is the key to financial independence down the road.
So, what does Orman suggest? To start, if you want to retire early, you’d need about $10 million – which, again, is easier said than done considering many Americans don’t have much saved.
According to Orman, if you want to retire early, live below your means. She also suggests taking advantage of matching retirement contributions from employers. And she suggests you keep from withdrawing social security before the age of 70.
“More than 90% of participants in the Schroders survey said they are well aware that if they wait until age 70 to start claiming they will receive the biggest possible monthly payment. A benefit that starts at age 70 is 76% higher than if you start receiving your payout at age 62,” she says, as quoted on SuzeOrman.com .
Top Questions to See if You’re Ready to Retire Millions of us wish we could retire early in life.
Unfortunately, it’s not always doable. Right now, according to an AARP survey , about 20% of adults over the age of 50 have no retirement savings to speak of. About half say they’re worried they won’t have enough money to support their retirement years. And about 26% of people say they just don’t expect to retire at all.
If you want to retire early, save, budget, maximize retirement plans, and ask yourself key questions. For example, why do you want to retire early? If it’s because you hate your job, find something else or maybe create a side hustle for yourself.
Are you prepared for the unexpected? Life is always unpredictable. A friend of mine just unexpectedly paid out thousands of dollars to repair his flooded basement after a storm. He wasn’t expecting his basement to be a swimming pool, but that’s what happened.
Are you prepared for healthcare bills, or unforeseen health issues? If you retire early and don’t qualify for Medicare, you may be faced with the hardship of rocketing healthcare costs. I’ve seen family healthcare plans decimate retirement plans. So, it’s vital to plan for that.
Also, what does your ideal retirement look like? Develop a clear idea of why you want to retire. Or, are you just really burned out from the daily grind with a hated job, with a desperate need for change?
Plus, you need to consider how much you need to spend every year on rent or mortgage, healthcare and long-term costs, groceries, medication, transportation costs, or even pet expenses. Plus, do you expect to travel a lot, and how much do you foresee spending? Maybe you have plans to help your children, and even their children with things such as college tuition.
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