Suze Orman is retired, but she doesn’t have to worry about paying her bills or coming up short at the end of the month. Suze Orman invested in several different retirement plans before she retired. Some of these plans she had to find out about herself because they were kept top secret. Today Suze Orman wants the world to know how they can retire securely.
The most common type of retirement plan is a standard 401K plan. This is a plan a person pays into through their job or on their own. Some jobs even match the percentage of whatever the employee pays. Though Suze Orman thinks any retirement plan is better than none at all, she does not recommend the 401K plan. The only reason why is because there are hefty taxes to pay whenever the money is taken out. The money can be taken out in a lump sum, or it can be taken out in a series of checks. Regardless, there will be taxes to pay.
Suze Orman believes the best approach would be to invest in a Roth IRA. A Roth IRA functions much like a standard 401K. The only difference is that the holder of the account pays taxes every time money is added to the account. However, when the money is drawn out, there will be no taxes at all. Statistically, people have found more success and have been happier with a ROTH IRA. A Roth IRA is also better for retirees who are trying to plan a comfortable future. They will not be surprised by sudden taxes they never knew about.
One investment alternative people do not know about is a Health Savings Account or HSA. Many jobs and banks do not tell people they offer this type of retirement plan. The reason why is because the account holder never has to pay taxes. Additionally, the account holder can withdraw the money anytime. However, some plans have restrictions where the account holder can only withdraw the money for emergency health reasons.
Overall, Suze Oram believes it is best to start saving for retirement starting at 13 years of age. Today, many people are saving money right in their home to avoid paying taxes. Though Suze Oram favors not paying taxes on money that is worked for, she believes in collecting interest, especially on an account that a bank will hold for 20 years or longer.