Suze Orman - You need 20M to retire early

According to FIRECalc my net worth could hit about $20M adjusted for inflation after I've been retired for about 45 years if I maintain my current withdrawal rate so I guess after 45 years of pre-retirement I can safely retire according to her.



"
Here is how your portfolio would have fared in each of the 108 cycles. The lowest and highest portfolio balance at the end of your retirement was $2,000,000 to $96,990,884, with an average at the end of $20,355,092. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)?​
 
So much of this stuff I read about the FIRE "movement" is talking about those trying to drop out of the workforce at age 30-ish or even younger. Without running numbers in firecalc, I tend to agree that $2M probably wouldn't cut it to support a 40- or 50-year retirement, at least to maintain a typical middle-class American lifestyle and raise children.

But how many people actually FIRE at age 25 or 30? (Kudos to any here who accomplished that without winning the lottery!) Meh, more financial porn.
 
I find that many, possibly most, yahoo articles are too shallow to be useful.
 
The few people on Mr MM that retired in their 30’s seem to be doing fine. It’s interesting that many of them end up going back to work after a few years and I’m guessing it’s too boring having all that free time while everyone else that age is still working. Some went back to work because of divorces.

On her show she was always telling people they couldn’t afford to retire and to work until 70. It always made me cringe because many people won’t live until 70.
 
Clearly, Suze has little experience with the FIRE crowd. I suspect her target audience consists mostly of non-savers. After decades of giving the same lecture, her mantra has been carved in stone, and it's one that does not fit savers.
 
GalaxyBoy said:
So much of this stuff I read about the FIRE "movement" is talking about those trying to drop out of the workforce at age 30-ish or even younger. Without running numbers in firecalc, I tend to agree that $2M probably wouldn't cut it to support a 40- or 50-year retirement, at least to maintain a typical middle-class American lifestyle and raise children.

But how many people actually FIRE at age 25 or 30? (Kudos to any here who accomplished that without winning the lottery!) Meh, more financial porn.
Click to expand...

Agree.
It would be interesting to know the early retirement ages for the folks on this forum. I know there are a few who retired in their 30's, but I think the majority were a bit older.
Anything younger than 65 is ER to me!!
 
This from the self aggrandizing financial advice expert who also shared years ago that she had led a fake life driving very expensive cars, carried mucho debt, and was a status signaler (reformed - ha!). Old or new news from Suze is likely not worth anyone's time. No I did not click nor read the article.
 
njhowie said:
Well, apparently inflation raised her number from "$5 million or $6 million, maybe $10 million" to $20 million in under a year. She's laughable now more than ever. She must be upset that Dave is getting more headlines than she is with clickbait titles.

I know we discussed this here, as did most other FIRE boards when she said it last year.

https://finance.yahoo.com/news/t-lost-compounding-suze-orman-120000501.html
Click to expand...

Wait a minute, the context was
But she explained that it would take a lot of money to make retirement work at, say, age 35.

"You need at least $5 million, or $6 million," she said. "Really, you might need $10 million." In her opinion, anything less wouldn't offer you enough protection from a potential financial catastrophe, like an expensive illness.
Click to expand...

So if you retired at 35 today (or in 2018), you probably won't get much in SS, and SS might get affected (taxed, reduced) for someone who is 35 today (30+ years from FRA).

That's a lot of years of health care to cover, and who knows what might happen between now and Medicare?

https://www.census.gov/library/publications/2023/demo/p60-279.html

"Real median household income was $74,580 in 2022".

At age 35, I'm going to say it might be prudent to hold $1M in 'reserve' and let it grow (or w/o 'compartmentalizing', reduce your WR to 80% of plan).

Let's add in $10K for health care, and say $85K Inflation Adjusted Withdrawal Rate (IAWR), and ignore SS. An IAWR of 3.3% seems to be on the edge of a 'forever' plan, so 80% of that is 2.64%. And 85,000 / 2.64% requires a $3.2M nest egg.

So OK, *maybe* $5M is high, but there sure are a lot of unknowns between 35 and EOL.

-ERD50
 
ERD50 said:
Wait a minute, the context was

So if you retired at 35 today (or in 2018), you probably won't get much in SS, and SS might get affected (taxed, reduced) for someone who is 35 today (30+ years from FRA).

That's a lot of years of health care to cover, and who knows what might happen between now and Medicare?

https://www.census.gov/library/publications/2023/demo/p60-279.html

"Real median household income was $74,580 in 2022".

At age 35, I'm going to say it might be prudent to hold $1M in 'reserve' and let it grow (or w/o 'compartmentalizing', reduce your WR to 80% of plan).

Let's add in $10K for health care, and say $85K Inflation Adjusted Withdrawal Rate (IAWR), and ignore SS. An IAWR of 3.3% seems to be on the edge of a 'forever' plan, so 80% of that is 2.64%. And 85,000 / 2.64% requires a $3.2M nest egg.

So OK, *maybe* $5M is high, but there sure are a lot of unknowns between 35 and EOL.

-ERD50
Click to expand...

That point is with this new article, even if you accept what she said barely 8 months ago, it's meaningless, because today, if you continue to accept what she says, you need $20M.

It's clearly clickbait and nothing more.
 
Nonsense from Suzie Orman. Definitely not interested in her poor advice.


The $20M is ridiculous. She has no clue about future unemployment or social safety nets, either, for that matter.
 
If you FIRE at 35 her message might actually be relevant. In future dollars you might really need 20 million.
 
BeWealthy said:
I find that many, possibly most, yahoo articles are too shallow to be useful.
Click to expand...
+1
Yahoo articles have become a real (but sad) joke. There's usually some element of truth in what they say, but it's small. Not much better than click bait these days. IMO
 
I thought she retired to the Caribbean nearly a decade ago. She must be bored.


_B
 
Not clicking either. The discussion has been entertaining :)
Based on all the talking heads guidlines, we are in the crowd that needs to work until 70 and hope SS does not get a haircut. I think we will pass on that idea.
 
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All I know is that if my personal rate of inflation does not dramatically slow down (so far in 2024 it is not) my current annual budget will become $1.07M/year by the time I hit my projected life expectancy. Even at the Feds alleged target rate of 2% annual inflation, my nest egg will be worth just over half of current value.

$20M might be accidentally right but for the wrong reason for younger generations.
 
No. Some people are twisting it around. She's not talking about needing $20M a hundred years from now and that you will spend $20M over your retirement.

She is saying you should HAVE $20M NOW to retire early.

Using the 4% rule, that's $800,000/yr in today's dollars and adjusted for inflation every year.
 
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She's making her next $20M on outrageous clickbait statements.
And you are making her that money.

That's my summary of her and this world we live in today.

PWF
 
So to be fair to her, I'd say she is not reacting to a forum like this, but rather some of these ridiculous FIRE bloggers and subreddits. Of course you don't need $20M, but reality is even $2M is not the same if it is in a traditional vs Roth vs taxable. $2M invested is very different than $2M equity in your primary residence.

Other than this forum, I find far too much of the FIRE conversations act like its super simple and you just get to number and quit, its thats simple.. vs. most of us have complex spreadsheets, looking into tax law, created a tax plan and withdrawal plan, know all the details of the ACA and how SS is calculated and have budgets that include home and care replacements and a plan for LTC. Most of which that is all glossed over and often thought of as "not a big deal".

Yes you can delay paying taxes and get a huge ACA subsidy but you should also have accounted for the tax consequences later on as then you may have actually needed $3-4M instead.
 
I retired at 52 with well under $2M. But we had DH's SS, my micro pensions (pays th
​
e utility bills), and rental income. About half of our cashflow comes from savings.

Almost 10 years later the nest egg is bigger despite having expanded our spending on travel. I'm still not on SS. Healthcare is not as expensive as some have suggested (someone said $10k/year.... We have a family of four (2 kids in college) and spend under that. ACA helps those who have smaller MAGI. Having just finished my taxes, our gross income was close to 150k... But a big chunk of that was a Roth conversion. We live very comfortably in a very HCOL area. But our house is paid off, so it's not that bad. We do not have $20M. I am not going back to work.

Suzi Orman makes generalizations based on 1) her lavish lifestyle and 2) the financial idiots who call in who would all fail the marshmallow test. It does not apply to people who stay within their budget, save, and are comfortable with a non lavish, but comfortable lifestyle.
 
A few years ago she gained a lot of attention by saying you need at least $5M to retire early. Now she need to up that amount to $20M to get more attention.

Next year, she'll say you need at least $50M to retire early. It's all about the clicks.
 
I haven't watched or listened to Suze for a while, but I thought that her advice was generally fine. I just chalk up much of her hyperbole to the needs of someone in financial entertainment field to have a shtick that gets eyeballs.

Her recent comments about FIRE are dumb, but her overall advice of not buying stupid stuff, avoiding keep-up-with-the-joneses-itis, and avoiding most debt is good for as many folks to hear as possible.

She's also not wrong that a 35-year-old with $2M isn't an automatic lock for FIRE. Yes, it can be done (I bet most folks on this board could do it), but if you've still got a mortgage, need a new car every few years, and live in a high COLA it could be tough.
 
njhowie said:
That point is with this new article, even if you accept what she said barely 8 months ago, it's meaningless, because today, if you continue to accept what she says, you need $20M.

It's clearly clickbait and nothing more.
Click to expand...

Agree that it's clickbait, which is why I didn't click on it (I'm just responding to what was posted here)!

-ERD50
 
SO should stick to her hustle on PBS. They lover her there.

She apparently forgets that most folks have (at minimum) SS when they RE. My mom and dad retired comfortably on their SS and much less than a quarter million (literally) in the bank. Admittedly, they have been gone for 25 years now.

SO has probably been a net positive (much like Dave Ramsey and others.) She has a good take on consumer credit, saving and (sometimes) investing. BUT she has this "thing" about ER which I'd guess goes back to something in her past. I have ignored her for years while giving her kudos for her popular books and TV programs which do have some good stuff for the average person. ER is NOT one of those things I'd ever listen to SO about. YMMV
 
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