Suze Orman, the renowned financial expert, recently appeared on a popular show to discuss a crucial aspect of retirement planning that many individuals overlook: the value of employer benefits. Her guest, Kiki, a 43-year-old single woman, had been planning to retire at 58 with a total of $410,000 in assets, no mortgage, and no consumer debt. However, Orman graded Kiki’s plan an F, highlighting a significant gap in her retirement math.

The problem, Orman explained, wasn’t what Kiki had, but rather what she was about to lose. Kiki worked and lived on a college campus, where her employer covered roughly $1,100 per month in rent, plus cable and electricity. As Orman pointed out, ‘You have absolutely no expenses whatsoever.’

However, the moment Kiki retired, those benefits would disappear, and her monthly costs would balloon to $4,000 or $5,000 per month. This would be due to her having to pay for housing, health insurance, and long-term care insurance herself. Orman walked through the numbers precisely, explaining that if Kiki continued on her current path and retired at 58, she would have approximately $970,000 in her 401(k) and $230,000 in a Roth IRA, totaling around $1.2 million.

Although this amount seems substantial, Orman noted that the 401(k) withdrawals are taxable, and Social Security wouldn’t kick in until later. After accounting for taxes, Orman estimated that $1.2 million would generate approximately $2,966 per month in after-tax income. Against $5,000 in monthly expenses, this would result in a $2,000-per-month shortfall, which adds up quickly.

Orman emphasized that this gap was the F. She explained that many 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.

For Kiki, the housing and utilities subsidy alone was worth approximately $13,200 per year, before factoring in any employer-sponsored health insurance, retirement contributions, or other perks. In retirement, she would need to replace every dollar of that from her own savings. Orman’s advice was for Kiki to work until 67 instead of 58, adding roughly $1 million more to her retirement accounts and a substantially larger Social Security benefit.

The lesson for anyone with a generous benefits package is to add up everything their employer pays that never appears on their pay stub. This number, not just their salary, will help them calculate their actual standard of living. As Orman pointed out, ‘You said you were energetic. You said you don’t even know what you would do after retirement. Great.’

Orman’s F serves as a reminder that building a retirement plan around current expenses without accounting for employer benefits can lead to a trap. Many workers fall into this trap by assuming their current expenses will remain the same in retirement, without considering the costs they’ll incur once their benefits disappear. 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. This means employers absorb 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.

Orman’s advice is to calculate the dollar value of employer benefits and incorporate it into retirement planning. This will help individuals accurately assess their standard of living and make informed decisions about when they can afford to retire. As Orman emphasized, ‘Before deciding when you can afford to retire, add up everything your employer pays that never appears on your pay stub.’