Suze Orman Says Retirees Don’t Necessarily Need Bonds. Here’s What She Prefers
Suze Orman tells retirees to skip bonds in favor of dividend stocks, and her inflation math is hard to argue with. But her approach skips a risk that can quietly wreck a retirement before the dividends ever catch up.
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Suze Orman has spent years nudging retirees toward stocks that pay them. On her podcast episode Suze’s Projections for 2026, released January 11, 2026, she described the income approach she prefers: “as time goes on and you are older and you’re looking for income, dividend-paying stocks that are good quality, that pay you a good dividend along with some of your money invested purely for growth.”
In the same passage, she said, “especially if you are in retirement years, is not to buy bonds necessarily.” The key words are “not necessarily.” She stopped short of telling anyone to sell their bonds.
Retirees face two opposite risks. Lean too hard on fixed coupons and inflation slowly eats your income. Lean too hard on dividend stocks and a bear market can force you to sell shares at the worst possible time.
Orman Is Right About Inflation and Light on Timing Risk
My view: her advice holds up on inflation math. It leaves out the risk of being forced to sell, and that risk can sink a retirement.
This is a long-held view. In her April 2024 outlook on Suze School, dated April 14, 2024, she said: “Some of the best investments you can make, even in your retirement years, obviously are in dividend-paying stocks. Also, that could give you growth, which keeps you up with inflation.”
Inflation reveals the weakness in bonds. Consumer prices rose about 4% between September 2025 and September 2026, based on the Consumer Price Index. A conventional bond pays the same dollar coupon no matter what groceries cost.
How $500,000 Plays Out Over a Decade
Take a hypothetical $500,000 nest egg. Put it in 10-year Treasuries yielding 4.96%, and you collect $24,800 a year, locked in.
Now assume inflation runs at 3% a year, for example. After 10 years, that same $24,800 buys only what about $18,454 buys today. Your paycheck never changes, but it buys less every year.
Compare a dividend portfolio with a hypothetical 3% yield. It starts at just $15,000 a year.
If companies raise payouts 6% annually, income hits about $26,863 after 10 increases and passes the Treasury income after roughly nine years.
The bond wins on cash collected over that first decade. Ten years of Treasury coupons total $248,000, compared with about $197,712 in dividends. Orman’s approach pays off late. You give up income early to get rising income later.
A Dividend Cut Hits Harder Than a Bond Coupon
Hold a Treasury to maturity, and the coupon comes as expected. Dividend stocks make no such promise. A 35% bear market would reduce the $500,000 portfolio to $325,000 on paper.
A 25% across-the-board dividend cut would drop that $15,000 of income to $11,250.
Bonds also do more than she suggests. Treasury Inflation-Protected Securities adjust with prices, and the 10-year real yield sits around 3% above inflation. A retiree can get inflation protection from bonds without taking on stock risk.
Your Income Gap Decides Whether You Need a Bond Cushion
One question settles this: can you cover your spending without selling shares in a down year?
If Social Security, a pension, and dividends already pay your bills, a falling stock price only lowers your account balance. You don’t have to sell, so you never lock in the loss. Social Security helps here. The average retired worker’s benefit increases to $2,170 a month in 2027 after a 3.6% cost-of-living adjustment.
Suppose you do have a gap; the math changes. Say you need $20,000 a year beyond guaranteed income. Holding five years of that gap means $100,000 in Treasuries, TIPS, or CDs. That cushion lets you ride out a downturn without selling shares at a loss.
Four Steps to Build a Retirement Income Plan That Survives a Bear Market
- Calculate your income gap. Subtract Social Security and any pension from your annual spending. Use the Social Security Administration’s calculator at SSA.gov to get your real benefit figure.
- Size the cushion. Retirees often hold several years of that gap in a ladder of Treasuries, TIPS, S or CDs that come due one after another. Shop around: the national average 12-month CD pays only 2%, and online banks often pay well above that.
- Screen dividends for growth as well as yield. Orman specified “good quality.” Look for long records of raising payouts and earnings that cover the dividend well.
- Stress-test your income. Cut your expected dividends by 25% on paper. If you can still pay your bills, your plan can handle a recession.
Orman is right that rising dividends protect your income from inflation better than fixed coupons do. A bond cushion matters most for retirees who might otherwise have to sell stocks in a crash to pay the bills. If building income you never have to touch the principal to collect is the goal, we laid out the full ladder in a free guide here.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
