Suze Orman warns that a retiree’s biggest asset can be misleading

A person approaching retirement may look financially secure on paper, yet much of that wealth can be tied up in assets that are far less accessible than cash or brokerage investments.

Suze Orman, host of the “Women & Money” podcast, cautioned in a podcast episode that counting all home equity as part of net worth can make a household appear stronger than it truly is.

A primary home does count as an asset, but tapping its equity usually means selling the property, borrowing against it, or using a reverse mortgage.

Retirees who make spending decisions based on total net worth instead of liquid resources may end up drawing too much or leaving work before their finances can support it.

Suze Orman’s warning points to a common retirement blind spot

Many retirement calculators add up assets without clearly separating money that can be spent right away from equity locked inside a main residence.

Orman said that this one-number approach can create a false sense of security, especially when rising home values boost net worth without producing any usable income.

Nadia Evangelou, director of real estate research at the National Association of Realtors (NAR), said homeowners in their 60s have typically built up about $200,000 or more in housing wealth from appreciation alone, roughly five times the median retirement savings.

While retirement assets are more concentrated among higher-income households, for many middle-class homeowners, their home is their single largest asset as they transition into retirement.

For retirees whose wealth is mostly tied to their homes, that difference can matter a great deal. Their net worth may look sizeable even when their accessible financial cushion is thin.

Home equity and retirement accounts make up most household wealth

According to the Employee Benefit Research Institute (EBRI), the median family with a working head of household between ages 25 and 64 holds 78.2% of total wealth in just two categories: individual retirement accounts and home equity.

That share climbs with age, rising from 55% for families headed by someone ages 25 to 34 to 87.4% for those ages 55 to 64.

Geoffrey Sanzenbacher, a research fellow at the Center for Retirement Research (CRR), estimated that Americans age 65 and older hold about $12 trillion in home equity that remains untouched and locked in primary residences.

His research also found that housing wealth makes up most of total wealth for older households in the second and third quintiles of the wealth distribution.

Only the top 20% have enough financial assets that home equity makes up a relatively small part of their overall resources.

Converting home equity into cash can be costly and slow

Accessing home equity can involve transaction costs, borrowing expenses, relocation, and limits on how much cash a homeowner can actually receive. The trade-offs vary depending on whether a retiree sells, downsizes, or borrows against the property.

Selling unlocks the equity, but it can also bring agent commissions, closing costs, moving expenses, and the emotional strain of leaving a longtime home.

Sanzenbacher has also pointed to the sentimental attachment that can make older homeowners hesitate to downsize, even when it could improve their financial flexibility.

Reverse mortgages provide another option, allowing eligible homeowners to borrow against equity without required monthly payments. But interest and fees can grow the balance over time, shrinking what remains for the homeowner or heirs.

A 2017 Journal of Finance study, “Reverse Mortgage Loans: A Quantitative Analysis,” found that just 1.9% of eligible homeowners had reverse mortgage loans in 2013.

Turning home equity into spendable money also takes time, something liquid assets do not require. Selling a house can take months of listing, negotiation, and closing.

Market conditions can change during that period, potentially lowering the amount a seller receives before the deal is finished.

A retiree who needs emergency cash cannot speed up a home closing or withdraw part of the equity the way money can be taken from a brokerage account. Orman drew a sharp contrast on her podcast, noting that stocks remain liquid even in a crisis, while a single event can wipe out a home’s value.

How retirees can pressure-test their plans

Orman advised retirees to calculate two versions of net worth, one including the house and one excluding it, and to base withdrawal plans on the lower number while treating any future proceeds from downsizing or a reverse mortgage as extra support.

A plan built around the smaller figure should remain workable whether property values rise, stall, or fall in the early years of retirement.

Vanguard’s 2025 Retirement Outlook found that workers who save through a defined contribution plan are nearly twice as likely to be retirement-ready as those without one, underscoring the importance of accessible accounts once paychecks end.

Timing also matters. A 2026 brief from the Center for Retirement Research found that sellers in their 80s receive about 5% less than sellers in their 40s for comparable homes.

For retirees who expect to downsize, delaying a sale can reduce the proceeds available to cover later expenses.

Vanguard’s Principles for Retirement Income also recommends keeping a contingency fund and spending reserve to avoid having to sell investments during a market downturn.

In the end, a retirement plan should work even if home values do not rise, a future sale takes longer than expected, or a reverse mortgage is never used to pay essential bills.

By stress-testing withdrawals against lower asset values, preparing for surprise costs, and maintaining accessible reserves, retirees can rely less on uncertain home equity and build a stronger income plan.