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Suze Orman urges couples to coordinate workplace retirement matches
Orman says NBER research finds one in five couples could add $757 per year, totaling about $14,000 per couple by age 65, by saving smart as a team.
Suze Orman says many couples are falling behind on retirement not because they are failing to save, but because they are not saving in the most efficient way when both spouses have workplace retirement plans with employer matches, according to a Yahoo Finance summary of her recent blog post.
Orman argues that couples should maximize the match by treating their plans as one household strategy rather than separate accounts, noting that match formulas can differ between spouses. She gives an example where one plan offers a dollar-for-dollar match on the first 3% saved, while the other offers a 50-cent match on contributions up to 6% of salary, creating a “better bang for their buck” option that can be missed.
Citing research from the National Bureau of Economic Research, Orman says one in five couples could increase annual retirement savings by $757 through coordination, which she says can amount to roughly $14,000 by age 65 without adding extra out-of-pocket contributions.
Orman also points to NBER findings that lack of coordination can lead to other costly decisions, such as not refinancing a fixed-rate mortgage when it is beneficial, or keeping low-interest savings alongside higher-interest credit card debt.