Suze Orman once warned '$2 million is nothing' when it comes to retirement savings — but the average American falls far short of her suggested target. Here's how to catch up

Orman: For retirement '$2 million is nothing'

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With 4.1 million Americans reaching the retirement age in 2024 alone, very few will find themselves financially prepared to retire by Suze Orman’s count.

The U.S. government is calling this time ‘Peak 65’, since this will be the first year that such a large portion of the population will be reaching retirement age at the same time.

Financial guru Suze Orman once stated during an interview on the Afford Anything podcast: “If you only have a few hundred thousand dollars [in savings] or $1-2 million, I’m here to tell you, if a catastrophe happens… you’re going to burn up alive. Two million is nothing.”

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In a blog post from late last year Orman wrote that another solid retirement rule of thumb is to have 10x your current income saved by the time you are 67 years old.

A 2024 study from Northwestern Mutual shows that Americans believe they need $1.46 million to retire comfortably, but the current American’s average retirement savings sit at just $88k. Nowhere near enough for a comfortable retirement by Orman’s standard.

If you’re one of many Americans feeling behind on saving for retirement, there are a few things you can do to catch up.

Are you behind on saving for retirement?

Catching up on savings gets harder as we age, and we also lose out on the power of compound interest. Retirees can also make the mistake of paying for withdrawals to access money during retirement, losing savings to costly tax deductions.

Following Orman’s rule of thumb, you should have 3x your income saved by age 40 and double that by age 50.

To keep more of your money in your investments, Orman has long touted the advantages of putting money in IRAs. IRAs aren’t taxed when you make contributions, or when you withdraw, so they’re a popular retirement investment option.

Goldco can help you open a gold IRA to aid in securing your retirement fund.

Gold has long been touted as a safe haven asset during market uncertainty. Amid persistent inflation, gold prices have reached new heights, now standing at around $2,338 per ounce.

This tax-advantaged retirement account can help you stabilize your finances by allowing you to invest directly in physical precious metals rather than stocks and bonds that are subject to a more-volatile market.

One of the country’s most trusted precious metals companies – with an A+ rating from the Better Business Bureau – Goldco has helped thousands of clients protect their retirement.

With live precious metals charts, the ability to compare gold prices with other markets, and an account representative who can answer your questions, you’ll feel secure that your retirement nest egg is growing the way it should.

When you consider Orman’s warning that “$5-10 million to be adequately prepared for retirement”, it seems impossible to save without also growing your money through the stock market.

If being an active trader isn’t for you, then consider an automated portfolio through Wealthfront.

Wealthfront is an investing and financial services company that can help you grow your money in a way that aligns with your appetite for risk and investing goals.

By answering a few questions, Wealthfront can help you determine the optimal asset allocation by crafting a diversified portfolio spanning a range of assets — from stocks, ETFs and bonds to real estate.

Use real estate to bolster your nest egg

While Orman faced significant backlash for her statements, with critics arguing that her figures are unattainable for most, the underlying principle she advocates is prudence. FOr instance, she has always said you should try to pay off your home before you retire.

Whether that’s in the cards for you or not, Striking while the real estate market is hot is another option for retirement-minded investors who are also looking for some passive income now and in their golden years.

For example there are crowdfunding platforms like Arrived that allows individuals to invest in real estate without breaking the bank on a home or dealing with the work of being a landlord.

Backed by world-class investors like Jeff Bezos, Arrived is a investment platform and app where you can invest in shares of high-yielding single—and multi-family rental units.

When you create your account, you can browse available properties and learn about their share price, monthly rent amount, total target return, neighborhood information and more.

With a minimum investment requirement of just $100, you can start investing in rental properties and enjoy potential returns without the hassle of day-to-day property management.

And you aren’t limited to investing in properties directly.

Investing in a real estate investment trust (REIT) is a way to profit from the real estate market without having to buy physical real estate or worry about landlord duties like screening tenants, fixing damages and chasing down late payments.

Generally, REITs are publicly traded companies that own income-producing real estate like apartment buildings, shopping centers and office towers. They collect rent from tenants and pass that rent to shareholders in the form of regular dividend payments.

However, Fundrise is a private market firm that makes investing in real estate easily accessible with their exclusive eREITs and an approachable minimum investment.

Fundrise's eREITs, available exclusively on their platform, are designed to help you seize private real estate consistent income-generating potential.

Each eREIT is part of an investment strategy that can include a range of assets, including residential and commercial properties or real estate loans, ensuring diversification within your portfolio.

To start investing with Fundrise, all you have to do is sign up and answer a few questions about yourself and your investing preferences. From there, Fundrise will suggest a portfolio best suited to your goals and risk tolerance.

Seek professional guidance

Suze Orman may not believe that a $2 million dollar retirement portfolio is enough to see you through your golden years, but there are still many methods to grow savings that can give retirees a comfortable cushion.

Every person’s retirement plan is going to look a little different according to how much they’re hoping to save before retirement and when they’re hoping to retire.

It can be difficult to know what’s right for you without expert advice. That’s where WiserAdvisor comes in.

WiserAdvisor is an online platform that connects you with vetted financial advisors to make the process of finding the right advice easier.

Just answer a few quick questions about yourself and your finances, and the platform will match you with experienced financial professionals best suited to help you develop a plan to achieve your retirement goals.

You can view the advisors’ profiles, read past client reviews, and schedule an initial consultation for free with no obligation to hire.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.