Quick Read
Suze Orman advises retirees to calculate their net worth by excluding home equity, warning that a single catastrophe can render your largest asset worthless overnight.
A couple possessing $450,000 in home equity and $350,000 in investments should base their 4% withdrawal rate on the $350,000, rather than the combined $800,000 total.
Orman’s five-step strategy involves verifying insurance exclusions, ensuring you have replacement-cost coverage, and creating a thorough inventory of your belongings before a disaster occurs.
Developing an investment portfolio and managing one during retirement are distinct skill sets, yet few people receive guidance on the latter. This is the <a our house isn worth anything." They found themselves unable to sell the property or secure a loan, and their attorneys indicated that any <a probably going to be 30 years" to resolve.
Orman, the veteran <a I am asking all of you, if you are calculating your net worth, to look at what your net worth is without the equity in your home, so that you get a realistic view as to what you really could afford if all of a sudden your home went away."
If your retirement strategy relies on the assumption that you can access your home’s value, a single disaster or a frozen real estate market could eliminate the most significant asset on your balance sheet.
Record Home Prices Make Orman’s Warning More Urgent
Producer Robert Hasegawa reminded listeners that the cautionary tale originated “from about three years ago.” Since that time, the S&P CoreLogic Case-Shiller national home price index climbed from 293 in January 2023 to a record high of 337 in July 2026.
This represents an increase of approximately 15%. Note that this index operates with a delay of roughly two months.
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