Suze Orman's Guide to Estate Planning for Retirees

Suze Orman recently addressed an important financial query from Elizabeth, a 78-year-old retiree, on her "Women & Money" podcast. Elizabeth, who retired in May 2025, called in to seek financial advice after realizing all her funds were confined to her checking account. With a monthly income of $9,000 from Social Security and a pension, $111,000 in savings, and ownership of two properties, Elizabeth faces the challenge of planning her estate so her disabled daughter can manage or inherit the assets.

Orman cautioned against burdening the daughter with complex investment management, recommending stable, low-risk options such as Treasuries, CDs, and money market accounts. These investment routes offer interest without the volatility typically associated with equities. Current 1-year Treasuries offer a yield of approximately 4%, and 2- to 5-year Treasuries provide about 4.2%, presenting a conservative strategy that would secure around $4,400 annually in interest from her $111,000 savings, mitigating risk to the principal.

In contrast, a heavily equity-based portfolio could pose significant risks, especially if faced with market downturns. A 30% decrease in an equity-heavy portfolio would significantly deplete Elizabeth's savings—a scenario not ideal for her age, nor for her daughter lacking the expertise to manage such investments. Therefore, low-risk options align more suitably with their needs.

Discussing Elizabeth's real estate, Orman emphasized its likely substantial worth, given current market conditions. With U.S. tax laws allowing a step-up in basis, the properties' fair market value at Elizabeth's death will be crucial for tax purposes. This step-up essentially wipes out potential capital gains taxes on the value increase during Elizabeth's ownership.

The type of financial aid program her daughter receives significantly influences the estate planning strategy. SSDI does not impose asset limits, but SSI and many subsidized housing programs maintain stringent caps. Therefore, if her daughter benefits from such programs, establishing a living revocable trust or a special needs trust could be imperative. These trusts ensure that the daughter remains eligible for benefits even upon receiving an inheritance.

Orman's counsel highlights a comprehensive approach that integrates consideration of market stability, potential tax ramifications, and the daughter's financial aid constraints. This strategic planning underscores the importance of tailored estate management to secure the future of heirs with specific needs.