When it comes to retirement planning, few voices are as influential as Suze Orman. A New York Times best-selling author and former Emmy Award-winning television personality, Allman is a financial advice guru.
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Needless to say, Allman was highly respected for knowing his stuff. When it comes to retirement, she offers some helpful tips and tricks to make sure you’re prepared. Suze Orman offers seven retirement strategies to help you build a secure financial future.
Orman highly recommends Roth IRAs and Roth 401(k)s for all income levels. She believes there’s “no reason” to choose a traditional tax-deferred account when a Roth account offers tax-free growth and withdrawals.
One of the reasons Orman particularly likes Roth IRAs is that you can make tax-free withdrawals at any time during your life. While ideally you want to keep your money until your golden years, a Roth IRA can help you get out of a financial hole when push comes to shove.
Of course, if your employer offers a 401(k) plan with matching contributions, you’ll want to contribute as much as possible to the plan before contributing to a Roth IRA.
However, if your employer offers both a Roth 401(k) and a traditional 401(k), choose the Roth 401(k). Funds in a Roth 401(k) can be rolled into a Roth IRA without being subject to minimum distribution rules. This means that if you don’t need the money, you don’t have to take it out.
Market volatility is a reality of stock market investing. If you have 10 years or more until retirement, you shouldn’t sell stocks when the market drops. Orman says you should view these dips as great opportunities to acquire more shares. That’s because, more often than not, the market will rebound and your investment will rebound with it.
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Failure to claim an employer match on your 401(k) is like wasting money. Allman stresses the need to contribute enough to complete the entire game, which can add up to tens of thousands of dollars over time.
A life event like getting married shouldn’t break your bank. Orman said she has seen many cases where parents have withdrawn money from retirement savings or stopped paying for their children’s weddings. It might seem like an occasion worth making a financial sacrifice, but Orman says it’s not worth it if your retirement fund is at stake.
