Suze Orman has an answer for the chaos. Most retirement advice feels like a guessing game. One year you are fine the next you are watching your savings evaporate in a market correction. It is messy. And it is scary.
Here is the fix she proposes. Keep cash. Actual liquid cash. Not tied to the ticker symbols you check obsessively on your phone.
The Market Is A Fickle Friend
People love their 401(k)s. They love their Roth IRAs. These are great vehicles for long-term growth. They are terrible vehicles for emergency liquidity. Orman points out the obvious thing everyone forgets. Markets crash. They do it often.
“It’s not always that stocks go down and stocks go up.” Wait. She actually said something closer to this: sometimes everything goes down at once.
When that happens you need to eat. You need to pay your electric bill. If you don’t have cash sitting there you sell stock at a loss. You lock in the pain. It hurts. A lot.
Stash Away 3 To 5 Years
This is the number that matters. Orman wants you to have three to five years of total living expenses parked in safe accounts.
Safe means what?
– High-yield savings accounts.
– Money market accounts.
– A checking account with a mattress full of greenbacks underneath.
Do not put it in a CD with an early withdrawal penalty unless you know you will not touch it. The key is accessibility. If the stock market takes a bath and needs 36 to 60 months to climb back up you do not sell a single share. You just live off the cash.
“Five years is safer.”
She said that on the “Women & Money” show. It sounds conservative. Maybe too conservative. But when the numbers drop in red across every screen in your brokerage account conservatism feels like luxury.
If the market crashes you still have a chunk of money not affected and accessible.
That sentence changes everything. You sleep better. Or you pretend you do.
Harvest The Losers
So you are retiring next year. Or maybe the one after that. You have a portfolio that looks great on paper. What now?
Orman has a trick for this. Look at your holdings. Find the underperformers. The ones that have sat stagnant. The ones that are barely keeping pace with inflation. Sell them.
It sounds counterintuitive. We want to keep winners and ditch losers. Not here. Take the cash from the stocks that aren’t pulling their weight. Put it into that safety bucket.
If all your stocks are crushing it? Take a little from the big winners too. Sip it. Slowly build up the reserve.
Is This Really How It Works?
This approach removes the fear factor. It also requires discipline. You cannot chase trends with that portion of your wealth. You leave it alone. You watch it earn pennies while your other accounts take swings at hundreds.
It is not glamorous. It is not sexy. It is survival.
How much anxiety are you willing to trade for certainty? Maybe a bit too much? Maybe just enough to let you actually enjoy those golden years instead of stressing over the closing bell every Friday?
