Suze Orman says US retirees now need to have a five-year ‘just-in-case’ fund — but is that a realistic goal?

Jessica Wong

Tue, May 20, 2025, 10:00 AM 5 min read

If you're heading into your golden years without a sizable "just-in-case" fund, you could be walking a financial tightrope without a safety net.

Suze Orman expressed this concern during a recent episode of her Women & Money podcast. The personal finance expert believes seniors should save enough money to cover three-to-five years’ worth of living expenses in liquid accounts that are shielded from stock market turbulence and can be easily cashed out without having to sell any assets.

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Her reasons for exercising such caution are simple: Orman warns that when the stock market crashes, recovery isn't always swift. In fact, it can take years for the market to rebound. For retirees who rely on investments to cover their monthly bills, a downturn could force them to sell at a steep loss just to survive.

“It’s not always that stocks go down and bonds go up, or bonds go down and therefore stocks go up,” Orman said on the podcast. “Sometimes everything can go down.”

Orman’s just-in-case fund is a strategy that, on paper, screams financial wisdom. But is it realistic for the average American?

According to the Federal Reserve’s 2022 Survey of Consumer Finances, the average retirement savings for American families is roughly $333,940.

Diving deeper, households headed by those under 35 are looking at a median retirement savings of just $18,880, while the median for those aged 65–74 is about $200,000. That makes Orman’s ideal "cushion" out of reach for many typical Americans.

The upside of Orman’s advice is clear: a five-year just-in-case fund provides a powerful buffer against market volatility, giving retirees the peace of mind that comes with not having to sell stocks in a slump. It’s a form of self-insurance that could save thousands in losses during bear markets and could help retirees with sleeping better at night.

But the downsides are just as real. Building up three-to-five years’ worth of cash funds, which likely means saving hundreds of thousands of dollars, requires one to have a level of wealth that many Americans just don’t have.