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Popular finance personality Suze Orman says perhaps “no decision is bigger” than deciding when to take your Social Security benefits.
Soon-to-be retirees can start receiving their benefits as early as 62 if they so choose — but Orman advises that it’s better to wait to max out your monthly checks and benefit your future older self in the long term.
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In a blog post titled Navigating When to Claim Social Security Orman wrote, “remember… a woman who makes it to age 65 in average health has a 50% probability of still being alive at age 88. That’s an argument for waiting if you expect to rely on Social Security for a lot of your retirement income.”
In a related LinkedIn post, she said “I encourage you to keep returning to this thought exercise: What are the financial steps you might take today to be kindest to your future older self? The 88-year-old, the 90-year-old, the 95-year-old?”
Suze Orman regularly urges people approaching retirement to think deeply about the financial decisions that will benefit their future selves.
Here are a few of her key points to consider.
Do good things really come to those who wait?
A study from life insurance company MassMutual found that 40% of Americans aged 55 to 65 believe Social Security will be their biggest source of income in retirement, ahead of 401(k) plans, investments, and pensions.
Orman explains that for every month past your 62nd birthday that you don’t claim Social Security, you’ll snag a slightly larger payout when you do start receiving your benefits.
For example, according to the Social Security Administration, folks born in 1960 or later whose full retirement age is 67 would see their benefits reduced by about 30% if they start claiming them at 62.
Extending your retirement means you have more time to contribute to your retirement accounts. And Suze Orman has long touted Roth IRAs as an optimal retirement savings vehicle. But there are other IRAs you can consider.
For instance, if you’re optimizing for stability with your investments, gold is typically more stable than stocks during economic downturns and recessions. In fact, gold has increased in value sevenfold over the last 100 years
Gold can’t be printed out of thin air like fiat money, and its value is largely unaffected by economic events around the world.
And because of the precious metal’s safe-haven status, investors often rush toward it in times of crisis, making it an effective hedge.
A gold IRA is one option for building up your retirement fund with an inflation-hedging asset.
Opening a gold IRA with the help of industry leader Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.
Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.
If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.
When it comes to preparing for retirement, having a solid financial plan is essential to make sure you can live out your golden years in peace. Whether you’re focused on safeguarding your assets or diversifying your portfolio, working with a financial advisor can be a crucial step in securing your future.
Finding a financial advisor that suits your specific needs and financial goals is simple with Vanguard.
Advisor.com connects you with vetted fiduciary financial advisors near you. All you have to do is answer a few simple questions about your finances, and Adivsor.com matches you with a short list of certified experts to choose from.
You can then set up an introductory meeting with no obligation to hire.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Orman says you need to start planning now
Orman encourages prospective retirees to consider waiting to optimize their benefits — but adds that they need to start planning and decide earlier rather than later.
"This is not a decision you can just shelve until you are 61," Orman warned in her post. "If you haven’t made plans to delay claiming your Social Security at that point, chances are you will just go ahead and start at 62."
The other option is to tap into your retirement savings — but you must plan for a substantial nest egg long before you enter your golden years. And this also means planning to make sure your family is secure in the future, including when you pass away.
For instance, life insurance can offer a versatile solution for your family, providing coverage to potentially replace lost income or settle outstanding debts.
By opting for term life insurance through a provider like Ethos, you are helping to ensure that your family will be taken care of after you’re gone. Term life insurance offers flexibility when you’re seeking affordable coverage while balancing other financial responsibilities.
Ethos offers an easy online process that allows you to get up to $2 million in coverage with terms ranging from 10 to 30 years.
To get a free quote, all you have to do is answer a few questions about yourself. Then, you can compare coverage and choose the right policy that best suits your needs.
Real estate investing as a retirement vehicle
Buying a property outright is a lot more difficult as mortgage rates continue to hover around the 7% mark and home prices remain high. Investing in shares of real estate can be another avenue to help you grow your nest egg and bolster your retirement savings.
On a recent episode of her podcast, Suze Orman commented on the importance of understanding your real estate market. “When it comes to real estate, you have to know more about it. You have to know about what real estate is doing in the area that you happen to live in,” she said.
However, buying property is far from your only option when it comes to investing in real estate.
One option for dipping your toes into residential investments is Arrived.
You can tap into this market by investing in shares of vacation homes or rental properties through Arrived.
Backed by world-class investors including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.
To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning quarterly dividends.
For accredited investors, Homeshares gives access to the $36 trillion U.S. home equity market, which has historically been the exclusive playground of institutional investors.
With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.
With risk-adjusted internal returns ranging from 12% to 18%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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