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Suze Orman, Warren Buffett and Other Money Experts Weigh In on How To Best Set Yourself Up for Retirement

Chip Somodevilla / Getty Images

Chip Somodevilla / Getty Images

There is certainly no shortage of advice on how to invest for a successful retirement. However, sometimes it can be hard to know who to trust. If you don’t have a reliable fiduciary financial advisor, the next best place to advice can be given to those who have become multimillionaires themselves.

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Popular financial icons like Warren Buffett, Suze Orman and Jim Cramer have managed to make money and invest money, so it’s worth listening to the advice they give to general investors. Here are some tips for a successful retirement of some of the most famous financial professionals.

Last updated: April 22, 2021

Business, data, reports, statistics

Business, data, reports, statistics


Buy index funds

Warren Buffett, “Oracle of Omaha,” upstairs, has been giving decades of investment advice to anyone who would like to listen. However, one of his most important tips for general investors was to simply buy index funds. See the article : Secure Act 2.0: A Gateway to ‘Rothification’ of Retirement?. Buffett always had little faith in the ability of active money managers to outperform the S&P 500 index, and even instructed his trustee to invest 90% of his assets in index funds after he passed. This general advice is also considered appropriate for most investors.

See: 11 Ways Warren Buffett Lives Thriftily

Roth IRA

Roth IRA

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Switch to a Roth account

In an interview in mid-June 2020 on the Pivot Podcast, financial commentator Suze Orman asked investors to use Roth’s accounts for their retirement savings. As Orman said, “Please, if you have the ability to make a Roth 401 (k), 403 (b), or a TSP, or a Roth IRA, these are the retirement accounts you want to be on. See the article : Havertown, Pa. couple donates $1,400 stimulus checks to local charities. Stay away from the traditional .. .where you get a tax write-off today, but in the long run, when you go to withdraw money, you will have to pay tax on it. “Orman added,” With Roth you pay taxes today, and in the long run, when you take it out, it’s tax-exempt. “

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A young woman pays bills / buys online with a credit card.

A young woman pays bills / buys online with a credit card.

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Avoid credit card debt

How can avoiding credit card debt prepare you for retirement? By freeing up funds that you can use for savings and investments. According to Mark Cuban, “accumulating credit card debt is the worst investment you can make.” Any amount you have to pay in credit card interest is just lost money that could instead have been used to fund your retirement accounts. For example, if you have $ 10,000 on your credit card at the national average credit card interest rate of 14.75%, you pay $ 1,475 per year in interest that could instead be used to invest in retirement.

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an older man using a calculator while reviewing his budget

an older man using a calculator while reviewing his budget Read also : Inheritance and TSP Beneficiaries.

Retirement savings need to be consistent, not complicated

Financial figure Dave Ramsey strongly believes in making things simple when it comes to retirement savings. According to Ramsey, it is much more important to invest consistently than to find some mysterious “get rich quick” scheme to achieve your retirement goals. Ramsey recommends investing only when you are financially ready and never invest in something you don’t understand. Under Ramsey’s retirement savings plan, the best way to achieve your goals is to set aside 15% or more in Roth IRAs and pre-tax retirement accounts. To achieve its retirement savings goals, Ramsey recommends investing in mutual funds with rising stocks with at least five years of consistent returns.

Read: Money advice experts would give their younger self

Female Millennials & amp;  New ways to invest.

Female millennials and new ways of investing.

Understand the difference between investing and speculating

Kevin O’Leary, known as “Mr. Wonderful” in the popular “Shark Tank” series, has no problem with people enjoying the daily trade. However, if you want a successful retirement, O’Leary stresses that you must first have a long-term investment plan. As quoted in The Penny Hoarder, O’Leary says, “My style is to leave money aside for life and leave it invested.” Once you set aside enough money for a financial basis, you can use any extra money you want to have any way you want, including daily trading.

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A businessman researching stock market data on a computer monitor.

A businessman researching stock market data on a computer monitor.

Wait to buy individual shares

Jim Cramer, a former hedge fund manager, you love him or hate him and runs CNBC’s “Mad Money,” is a stock trader by nature. However, for those who save for retirement, Cramer says they invest in index funds first. According to Cramer, the first $ 10,000 you set aside for your retirement savings should go to index funds to create a core portfolio. Once you’ve prepared that underlying investment, Cramer says, then you can start choosing individual stocks for your retirement portfolio.

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Sunset oil pump

Sunset oil pump

Buy funds that pay your bills

Robert Kiyosaki, author of the famous series “Rich Father,” suggests that most people save for retirement in the wrong way. According to Kiyosaki, instead of using traditional austerity methods like the IRA and 401 (k) plans, investors should buy cash-generating assets and pay their obligations. Kiyosaki says he and his wife “invest in property that [generate] cash flow like real estate, oil wells, business and more. Each month, money from these investments flows into our accounts, covering our expenses. Kiyosaki calls it “printing money,” finding ways to generate enough cash flow to cover all of his needs.

Read: Author of ‘Rich Dad Poor Dad’ Robert Kiyosaki: You must never say ‘I can’t afford it’

A young woman analyzing bills while writing in a diary.

A young woman analyzing bills while writing in a diary.

Arrange your financial house before investing

Suze Orman is a big fan of investing in Roth’s retirement accounts, but for younger investors she emphasizes that there is an even more important first step. According to Orman, before you invest at all, you should get rid of high-rate consumer debt, such as credit cards and personal loans, and you should create an eight-month emergency fund. As NextAdvisor was told, in partnership with Time Magazine, Orman suggests that, once you edit your financial house, “on average, I would cost a dollar each month with a certain amount of money in a VTI ETF. And at a discount brokerage house where there is none commissions. ”VTI is a symbol for Vanguard’s overall stock index, which includes stocks from across the market.

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A businessman sits at a desk and analyzes the project timeline.

A businessman sits at a desk and analyzes the project timeline.

Stay on the road

Warren Buffett is so full of investment wisdom that his recommendations could take up any place on this list. However, two of its most important ones are the ones listed earlier – buy index funds – and this one – stay on track. As Buffett noted in his 2018 shareholder letter, “although markets are mostly rational, they occasionally do crazy things.” According to Buffett, investors need the ability to ignore mafia fear or enthusiasm and focus on a few simple basics. “In other words, invest in the long run and don’t get too preoccupied day in and day out.

See: 21 Life Hacks by Warren Buffett that anyone can use

The businesswoman checks the data in the smartphone and tablet.

The businesswoman checks the data in the smartphone and tablet.

Speculate while you are young, choose more conservative stocks as you age

As mentioned above, Jim Cramer advises investors to target index funds before raising individual stocks in a retirement account. However, when that time comes, Cramer also has specific recommendations for the types of supplies you should own, and that depends on your age. “The younger you are, the more I ask you to take an aggressive stance regarding something speculative,” Cramer told CNBC. For older investors, “I think you need to try stocks like Johnson & Johnson, a company with years of experience paying dividends.”

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This article originally appeared on GOBankingRates.com: Tears Orman, Warren Buffett and other money experts are considering how best to prepare for retirement