Suze Orman Talks Retirement Strategies Amid Coronavirus Concerns

In these uncertain times, staying informed and financially prepared is essential. Many investors fear market declines, with recent data indicating nearly 20% would exit stocks after just a 5% dip. Such actions can lead to significant losses, especially when market rebounds occur.

This week, we welcome Suze Orman, a renowned financial expert with ten New York Times bestsellers to her name. Her latest book, "The Ultimate Retirement Guide for 50+: Winning Strategies to Make Your Money Last a Lifetime," provides valuable insights for those nearing retirement.

Join us as we explore market anxieties due to coronavirus and strategies for portfolio management. Suze shares her perspective on weathering this storm, including her shift from an 8-month cash reserve to a 3-5 year cushion to avoid tapping into principal during downturns.

Orman emphasizes that the location of your funds—whether in retirement or investment accounts—affects your strategy. She also addresses year-end tax implications and highlights the importance of diversification, comparing today's situation to the 2008 crisis.

She recommends focusing on preferred stocks, particularly dividend-paying ones that don't exceed 50% of earnings. Bonds and high-yield savings accounts are also discussed, along with the risks of exiting the stock market too early.

From her book, Suze outlines ten key considerations for retirees to optimize their finances and discusses the best age for women to claim social security. Check out her retirement tips featured in the AARP Bulletin.

Orman also critiques leasing vehicles, highlighting the financial folly of frequently upgrading to new cars. She stresses that downsizing savings can significantly enhance financial health, as wasting even a dollar can cost three to five times that in lost investment potential.

During the Mailbag segment, we discuss realistic expectations for investment returns in the coming years, alongside advice on increasing IRA contributions amidst market fluctuations. Listeners also inquire about managing 529 plan fees and job relocation considerations.

Transcript

Suze Orman: (00:02)
Valuing your possessions and finances prevents unnecessary spending.

Jean Chatzky: (00:18)
We aim to empower you to demand more from your finances. Learn more at Fidelity.com/demandmore.

Jean Chatzky: (00:36)
I'm excited to have Suze Orman here today. Suze, you're here with your latest book. How many is this now?

Suze Orman: (01:11)
This is my 11th book, but the 10th consecutive bestseller.

Jean Chatzky: (01:16)
It's titled The Ultimate Retirement Guide for 50 Plus. I'm glad you're here to discuss its relevance in today's volatile market.

Suze Orman: (01:39)
Absolutely.

Jean Chatzky: (01:40)
Tell us about your motivation for this book.

Suze Orman: (01:48)
My first book was about avoiding retirement mistakes. This new perspective addresses the emotional and psychological aspects of aging.

Jean Chatzky: (03:04)
How has that transition been for you?

Suze Orman: (03:07)
It was a significant shift, as I sold most of my possessions and moved to a private island.

Jean Chatzky: (03:12)
That's quite a change!

Suze Orman: (03:27)
It was an adjustment, but I found joy in fishing, which has become my new passion.

Jean Chatzky: (04:43)
That's wonderful!

Suze Orman: (04:44)
We travel to fish and enjoy new experiences together.

Jean Chatzky: (04:51)
Fishing sounds like a great outlet!

Suze Orman: (05:02)
It's rewarding and helps me stay connected to nature.

Jean Chatzky: (05:02)
What a transformative journey!

Suze Orman: (05:02)
Absolutely! I've also started a podcast to share knowledge with others.

Jean Chatzky: (04:51)
That's fantastic!

Suze Orman: (04:51)
I'm passionate about empowering others with my experience.