Suze Orman says you need this much cash to retire, and it’s more than you’d expect

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How much money do you really need to retire without losing sleep at night? If you think your 401(k) alone will cut it, think again — one wrong market move could put your retirement plan to sleep.

But figuring out how much you’ll need to enjoy your retirement isn’t straightforward. The costs can add up fast between health care, housing, groceries and maybe even a vacation or two.

And the reality? Everyone’s “magic number” is a little different. In fact, Northwestern Mutual (1) found in 2025 that the average American thinks they’ll need $1.26 million to retire comfortably, though most are far behind that goal. What’s more, blindly investing in the stock market without building a safety net can be a problem if you’re planning to retire at a specific age, and the market just so happens to be down.

This is something personal finance icon Suze Orman understands well.

“It’s not always that stocks go down and bonds go up, or bonds go down and therefore stocks go up. Sometimes everything can go down,” Orman said on her Women & Money podcast (2).

If you’re looking for a solid starting point, here are Orman’s rules that might help you get a good night’s sleep, though her magic number may surprise you (3) — especially compared to the $1.26 million golden ticket.

Orman shared her thoughts about how much to retire with on her podcast. Her advice is all about playing defense — especially in unpredictable markets.

Her first rule: Don’t rely on your 401(k) or IRA alone. Both are tied closely to stocks, and the market doesn’t always play nice.

Translation? If your retirement plan is riding the market rollercoaster, you could be in for a sharp drop when you’re hoping for smooth sailing. To soften the blow, Orman recommends stashing away three to five years’ worth of living expenses in a liquid, low-risk account — like a high-yield savings or a checking account.

That means your retirement savings should be higher than that $1.24M high water mark from Northwestern Mutual, provided you believe it aligns with your living situation. If you spend $50,000 a year in expenses, that means adding between $150,000 and $250,000 to your retirement target so you have the flexibility to time your exit.

Orman’s recommended “just-in-case” cash fund should not be tied to the market. That way, you’re not forced to sell investments at a loss just to cover rent or buy groceries.

“If you really wanna be on the safe side, it’s five years,” Orman said.

It’s worth noting that Orman has a bullish outlook on the American market for 2026. On an episode of her podcast from January 2026 (4), she said, “I think the United States is still the place of the most extraordinary opportunity out there … You have got to leave politics out of the decisions that you make with money.”

She noted that while many investment advisors are looking overseas for investment stability, she believes the U.S. market will remain strong in 2026. “I’m going to keep my money at home. Just that simple.”

If you feel that this is your year to pull your finances together, here’s how to begin building an emergency fund.

Read More: Approaching retirement with no savings? Don’t panic, you’re not alone. Here are 6 easy ways you can catch up (and fast)

Building a solid cash cushion isn’t just about peace of mind. Having easily accessible funds can help you navigate emergencies, smooth out your cash flow and even take advantage of surprise investment opportunities.

Ideally, building an emergency fund means you won’t have to tap into your investments to manage a crisis. Most advisors suggest banking at least three to six months’ worth of cash. Then you can start focusing on hitting your retirement benchmarks, unless you prefer Orman’s three-to-five year minimum.

A great place to start is with a high-yield savings account.

These offer better interest rates than traditional savings accounts, so your money works harder while remaining liquid. Plus, they’re usually insured by the Federal Deposit Insurance Corporation. This means qualifying high-yield accounts are protected against bank-based losses of up to $250,000, and sometimes more through partner banks.

While the national average interest rate for U.S. savings accounts is 0.39% APY (5), online banks can offer you better returns.

For example, a high-yield account like a Wealthfront Cash Account can be a great place to grow your emergency fund, offering both competitive interest rates and easy access to your cash when you need it.

A Wealthfront Cash Account currently offers a base variable APY of 3.30%, and new clients can get a 0.65% boost during their first three months for a total APY of 3.95%. That’s ten times the national deposit savings rate, according to the FDIC’s January report.

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, Wealthfront Cash Account balances of up to $8 million are insured by the FDIC through program banks.

Whether you’re planning to retire at 55 or 65, an essential part of the process is trying to be as debt free as possible come your golden years. If you’re struggling to pay down your debts, the two most common methods of tackling those payments are the avalanche and snowball techniques.

The avalanche method focuses on paying down your highest-interest debts first. This can create a cascading effect where, after the big debt is paid, you knock off the smaller ones quickly. Meanwhile, the snowball method starts with paying down your smaller debts one after another to build up steam.

Then, once you’re down to one debt, you put all your resources into paying it off. From here, it could be a good idea to funnel the money you were putting into clearing your debt in building either an emergency fund or your retirement savings.

Regardless of Orman’s optimism for 2026, it should be said that no one can always predict how the market will fluctuate. If you’re concerned about the stock market crashing, one way to protect yourself is by diversifying outside of stocks and bonds.

Typically, this is where alternative assets like precious metals, real estate or private equity come into play. A certain precious yellow metal has also been on a historic bull run until recently and, despite a late-January correction, is still up about 60% year-over-year (7).

If you want to test your mettle, you could work with [Priority Gold](https://moneywise.com/c/1/463/2022?placement=4, an industry leader in precious metals, to physically access gold and silver. Priority Gold provides free insured shipping and storage for up to five years through their Priority Platinum Package.

They also offer a 100% free rollover from an IRA into a gold IRA, if you want gold to be a bigger part of your retirement plan. Qualifying purchases can receive up to $10,000 in free silver

To learn more about how Priority Gold can help you reduce the impact of stock market fluctuations on your nest egg, you can download their free 2026 gold investor bundle to learn more. Just keep in mind that gold is often best used as one part of a well-diversified portfolio.

Don’t panic if you’re nearing retirement and your savings aren’t quite where you want them to be. In some cases, delaying retirement by even a year or two can make a huge difference. You’ll have more time to save, fewer years to fund, and you may increase your Social Security benefits in the process.

In addition to noting that many Americans think they’ll need $1.26M to retire, Northwestern Mutual broke down how much you’d need to invest at different stages of your life to reach this target. If you’re in your 20s, this number is just $330 a month, but for those in their 40s it jumps to $1,547 per month.

This highlights the power of starting young and saving consistently. If you’re just getting off the ground or looking for a set-and-forget savings strategy, you could work with an automatic investment service to tap into relatively safe bets like index funds or ETFs.

For example, with Acorns, any purchase on your credit or debit card is automatically rounded up to the nearest dollar. The excess, coins that would otherwise end up as loose change if you were paying cash, goes into a smart investment portfolio. So, that $4.25 daily coffee? It’s now a 75-cent investment in your future.

But these round-ups are only part of the puzzle. Acorns also lets you set up a recurring monthly deposit from your checking account to your savings or investing account, to help you build up a nest egg without even thinking about it. It’s one of the easiest ways to stay consistent and avoid spending that extra cash.

And the best part? If you sign up with a monthly automatic deposit, Acorns can help you get started with a $20 sign-up bonus.

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Northwestern Mutual (1); Women & Money (2), (4); Nasdaq (3); ; Federal Reserve Bank of St. Louis (5); @SuzeOrman (6); APMEX (7)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.