The Blubber

On the Afford Anything podcast, Suze Orman delivered a sharp critique of the idea that a $2 million portfolio is enough to retire early. She didn’t mince words: “Two million dollars is nothing,” Orman said. “It’s pennies in today’s world, to tell you the truth.”

Orman warned about financial risks that could quickly erode such savings. “If you have $20 million, $40 million, $50 million, or $100 million, be like me, okay. If you have that kind of money and want to retire, fine,” she said. But for those with $2 million or less, she cautioned: “If a catastrophe happens… what are you going to do? You are going to burn up alive.”

She was particularly skeptical of the popular 4% annual withdrawal rule. “I think that in the long run, $80,000 a year, especially after taxes and as you get older, is not going to be enough. You may think it’s enough, but it’s just not,” Orman stressed.

Her advice underscored the importance of a substantial financial cushion, especially to cover unexpected costs like health care or family support. “Think about it logically,” she urged, pointing to potential expenses that could easily exceed hundreds of thousands of dollars annually.

When asked if $3 million would suffice for early retirement, Orman was firm: “It’s not enough.” She added, “If you don’t have at least $5 million or $10 million, don’t retire early.”

Her bold claim sparked mixed reactions. Some viewed her perspective as overly cautious, while others supported it as realistic.

The financial blog Financial Samurai backed Orman’s stance, noting that today’s low interest rates require larger capital to generate adequate risk-adjusted income for early retirement. This is especially critical as traditional income sources like Social Security and pensions become less reliable.