1. Invest in an IRA
To avoid paying tax when making a withdrawal from your retirement account, Orman recommends you go for a Roth IRA account.
Because your contributions to a Roth account are made after tax, you won’t have to deal with deductions when you withdraw. Traditional IRAs, on the other hand, aren’t taxed when you make contributions, so you end up paying later.
In an interview with Wall Street Journal this year, Orman explained that a 25-year-old could start putting $100 a month into an S&P 500 index fund through a Roth IRA every year until they hit 65.
“It’s very probable that you will average a 12% annual rate of return over 40 years,” Orman said. “At the end of those years, you have a million dollars.”
Most banks and brokerage firms offer these accounts. But if you’re looking to combine the tax benefits of an IRA with a traditionally recession-resistant asset, opening a gold IRA might be worth considering.
This commodity-based individual retirement account allows you to both invest in gold — a solid hedge against inflation — and benefit from the tax advantages of an IRA.
Thor Metals is an industry leader in precious metals and authorized dealer for the U.S. Mint.
By opening a gold IRA with their help, you have the opportunity to diversify your portfolio and stabilize your finances in the face of persistent inflation.
2. Update your investment portfolio
Regularly revisiting your portfolio can help you ensure you’re making informed decisions that are in line with your financial goals and timelines.
As Orman advised in a 2024 blog post: “This is your retirement and your money. Financial literacy is a need, not a want.”
Orman also once told CNBC that she recommends either stocks or exchange-traded funds ETFs that pay dividends. So even if the market sees a downturn, your investments will still provide you some income.
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All you have to do is sign up and link your bank account. The app will automatically round up the total cost of your purchases and invest the difference in a smart portfolio of ETFs. So all it takes to help strengthen your portfolio and save for retirement is to make your everyday purchases and watch your money grow.
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3. Take a hard look at your finances
If you haven’t already, Orman says it’s time to buckle down and take a deep look through your budget.
When speaking with the Wall Street Journal, Orman emphasized that it’s crucial for people to live below their means but within their needs.
She compares strict budgets to diets, explaining, “If you restrict, you limit, you cut back, you don’t buy this, you don’t buy that, and then all of a sudden you explode and you go out and you buy everything at once.”
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On her blog, Orman emphasized that financial pros are not there to make decisions for you “but to help you carefully lay out and understand all the moving pieces of retirement finances.”
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