Suze Orman says the perks your job quietly covers could blow up your retirement math

Kiki is 43 and single, and has been telling herself she’ll retire at 58 for as long as she can remember. She doesn’t have a clear picture of what retirement will look like — but as she told Suze Orman, she does have $410,000 in total assets, no mortgage, no consumer debt and a monthly surplus after expenses.

By most measures, she’s doing well. Yet Orman graded her an F.

Must Read

The problem, Orman explained on her show, isn’t what Kiki has. It’s what she’s about to lose. Kiki works and lives on a college campus, where her employer covers roughly $1,100 per month in rent, plus cable and electricity. “You have absolutely no expenses whatsoever,” Orman told her.

But the moment she retires, those benefits disappear — and her monthly costs, currently just $2,145, could balloon to $4,000 or $5,000 per month once she’s paying for housing, health insurance and long-term care insurance herself.

The math that delivers the F

Orman walked through the numbers precisely. If Kiki continues on her current path and retires at 58, she would have approximately $970,000 in her 401(k) and $230,000 in a Roth IRA — roughly $1.2 million total.

That sounds substantial, but the 401(k) withdrawals are taxable, and Social Security won’t kick in until later. After accounting for taxes, Orman notes that $1.2 million would generate approximately $2,966 per month in after-tax income. Against $5,000 in monthly expenses, that’s a $2,000-per-month shortfall, which adds up fast.

That gap is the F.

Why employer benefits are an invisible perk

Kiki’s situation illustrates something most workers never calculate: the dollar value of what their employer pays on their behalf.

According to the Bureau of Labor Statistics, employer costs for civilian workers averaged $49.32 per hour worked, with $33.72 going to wages and salaries and $15.60 covering benefits. PwC found that employees are more likely to value a benefit when they understand how it directly solves a financial need — suggesting many workers might absorb their benefits package passively rather than calculating (and utilizing) its full dollar value.

For Kiki, the housing and utilities subsidy alone is worth approximately $13,200 per year — before factoring in any employer-sponsored health insurance, retirement contributions or other perks. In retirement, she’ll need to replace every dollar of that from her own savings.

Read More: Vanguard reveals what’s coming for U.S. stocks — and it could be bad news for this group of investors

The path to an A grade

Orman’s advice was that Kiki not retire at 58, but work until 67 instead. Those extra nine years of contributions would add roughly $1 million more to her retirement accounts, and her Social Security benefit — delayed to a higher claiming age — would be substantially larger. At 67, she notes Kiki’s after-tax monthly income would be approximately $7,300, which is comfortably above her projected expenses, rather than dangerously below them.

Orman also observed that Kiki’s own uncertainty about what she’d do in retirement was helpful. “You said you were energetic. You said you don’t even know what you would do after retirement. Great.”

The lesson for anyone with a generous benefits package

Kiki’s situation is a version of a trap many workers fall into: building a retirement plan around their current expenses, without accounting for what their employer covers in the background.

Things like health insurance, housing subsidies, transportation, meals, gym memberships and other perks don’t show up in a paycheck, but they do show up in a monthly budget. And when they disappear at retirement, the gap can be jarring.

According to the KFF 2025 Employer Health Benefits Survey, the average total annual premium for single health coverage was $9,325 in 2025, with workers contributing $1,440 on average. That means employers are absorbing roughly $7,885 per year per employee for single coverage alone — a cost retirees without Medicare or employer retiree coverage must replace entirely from their own pocket.

The lesson from Orman’s F is simple: before deciding when you can afford to retire, add up everything your employer pays that never appears on your pay stub. That number — not just your salary — will help you calculate your actual standard of living.

What To Read Next

This article originally appeared on Moneywise.com under the title: ‘You have absolutely no expenses’: Suze Orman says the perks your job quietly covers could blow up your retirement math

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.