If you haven't heard of Suze Orman, here's a quick intro. She was the first female stockbroker hired by Merrill Lynch in California, went on to become a V. P. of investments at Prudential Bache, and then opened her own financial firm.
She has long offered financial advice to the masses, via books, TV appearances, podcasts, and more. (A bit of trivia is that in college, one of her apartment mates was the girlfriend (and future wife) of John Belushi, one of the original Saturday Night Live cast members.)
She knows a thing or two about financial matters. Her thoughts on how much you should save for retirement might surprise you.
Image source: Getty Images.
What Suze said
Orman made a lot of headlines in 2025, when she suggested that a retirement-nest-egg goal of $2 million is "chump change." That may seem outrageous, but hear her out.
A key concern for her is longevity. Consider that most people are claiming Social Security in their early 60s. If you do so, retiring at age 62 or 65, you could possibly live to 95 or 100. That means your retirement could last between 30 and perhaps even 40 years. Therefore, however much you've socked away may need to support you for a very long time.
To think about this issue, I will apply the flawed-but-still-helpful "4% rule." It suggests that a retiree can withdraw 4% from their nest egg in their first year of retirement and then adjust subsequent annual withdrawals for inflation.
The table below shows how much you'd withdraw in your first year of retirement with nest eggs of various sizes:
|
Nest Egg |
4% First-Year Withdrawal |
|---|---|
|
$250,000 |
$10,000 |
|
$300,000 |
$12,000 |
|
$400,000 |
$16,000 |
|
$500,000 |
$20,000 |
|
$600,000 |
$24,000 |
|
$750,000 |
$30,000 |
|
$1 million |
$40,000 |
|
$1.5 million |
$60,000 |
|
$2 million |
$80,000 |
|
$2.5 million |
$100,000 |
|
$3 million |
$120,000 |
|
$4 million |
$160,000 |
Source: Author calculations.
Many people are aiming to retire with $1 million. If so, they might be withdrawing just $40,000 from their stash in year one of retirement. Let's add Social Security benefits to that -- which, as of January, averaged about $2,075 per month, or about $25,000 for the year. That would provide just $65,000.
If you've retired with $2 million and you apply the 4% rule, you'll withdraw $80,000. Will that serve you well enough? It could -- but it all depends on your expenses.
Note, too, that one of the 4% rule's flaws is that it's designed to give your money a good chance of lasting for 30 years. However, if you retire at age 62, your coffers might have gotten depleted by age 92 (or thereabouts).
How much should you save?
How much should you sock away? There's no one answer that suits everyone, so for the best results, think hard about your own situation and perhaps even consult a financial advisor.
Think about your health and how much you might be spending on healthcare. There's no way to know for sure what it will cost you, of course, but it's prudent to be prepared to spend a lot, just in case.
According to Fidelity, a 65-year-old person who retired in 2025 could expect to spend $172,500, on average, on medical and healthcare expenses throughout their retirement. That doesn't even include long-term care, over-the-counter medications, or most dental services. For a married couple, the average total is $345,000.
Think, too, about your hobbies and plans, your taxes and home costs, how much you plan to dine out, and how much you hope to bestow on loved ones as gifts. If you're suddenly worried that you haven't saved nearly enough, know that there are ways to catch up and improve your financial health -- and your financial future.
