It’s hardly a secret that Americans are woefully unprepared for retirement.
A 2024 survey by the Bipartisan Policy Center found that 49% of Americans ages 55 to 64 don’t feel confident in their retirement planning. Among those ages 45 to 54, that percentage rises to 52%.
Americans across all age groups also sorely lack savings for retirement. The Federal Reserve puts median retirement savings among 65- to 74-year-olds at just $200,000, while those between the ages of 55 and 64 trail behind slightly at $185,000.
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But a recent Northwestern Mutual survey found that Americans think it will take $1.46 million in savings to pull off a comfortable retirement. Since many older Americans’ nest eggs are nowhere close, it’s clear that some retirees will have to make some sacrifices.
But as important as it is to have savings for retirement, it’s equally important to have a plan for the unexpected. And financial guru Suze Orman warns that if you’re not preparing for these two events, you’re putting your future financial security at risk.
Suze Orman warns on retirement stressors
It’s not unusual for life not to go as planned, financially speaking. But Orman cautions that many Americans are better equipped to deal with setbacks during their working years than during retirement, when money tends to be much tighter.
Orman specifically warns working Americans to gear up for two possibilities that could shake up their retirement plans.
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The first is an earlier retirement than expected. A 2024 Transamerica survey found that 58% of retirees left the workforce sooner than they’d originally anticipated. And the reasons ran the gamut from health issues to job loss.
The latter can be especially detrimental to older workers due to the prevalence of age discrimination in the workforce. AARP research shows that 64% of workers ages 50 and over have reported seeing or experiencing age discrimination while on the job, which means that a layoff at an older age could become a permanent one.
Orman suggests that pre-retirees plan for this situation, even if it doesn’t end up coming to be.
“What would your retirement look like if you retired at 62?” asks Orman. “Could you find part-time work to bring in some income? Could you continue with your plan to delay claiming Social Security? Would you have the mortgage paid off?”
The second possibility Orman warns Americans to think about is being hit with a storm of unexpected expenses, whether it’s home repairs, medical bills, or something else.
“If that were to happen, would you have the cash in an emergency fund to cover things?” Orman asks.
Suze Orman says there’s a simple way to prepare for the unexpected
Since nobody has a crystal ball, it’s impossible to know what unpleasant financial surprises await — in life and in retirement. So Orman calls “saving more now” an obvious solution.
Older workers have a prime opportunity to pad their 401(k)s this year thanks to a super catch-up for workers aged 60 to 63.
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“If you are between the ages of 60-63, please know that there’s a new rule in 2025 that allows for super-sized 401(k) catch-up contributions,” Orman says. “While anyone between the ages of 50-59 can contribute a total of $31,000 this year, if you are 60-63, the contribution limit is $34,750.”
Orman also suggests that workers think about ways to shed expenses and free up more money for long-term savings. That could mean downsizing, becoming a one-car household, or withholding financial support from adult children.
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“Reducing spending is where you find the money today to build up your emergency savings. It also pays off by reducing the cost of supporting yourself in retirement,” Orman says.
Recent data from the Society of Actuaries Research Institute found that 20% of retirees have experienced a financial shock. The more prepared you are, the less likely an unexpected event is to wreck your retirement on a long-term basis.
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