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/ Source: TODAY
By Nicole Spector

Register for Suze Orman’s Personal Finance Online course here, until 8 p.m. EDT Sept. 25. Use the code TODAY.

Many working Americans feel fear when they think about their retirement. We hear so much about how we aren’t saving enough, that we reactively ask, “Well, how much should I be saving?”

Personal finance expert Suze Orman says we’ve been asking the wrong question all along.

"'How much do I need to retire?' is a stupid question!" she told TODAY. "The real question is, 'What is the best way I can save for my retirement?'"

And it's not just about how you allocate savings — though, that is part of the solution — but about things you may think have nothing to do with retirement — like whether you own or mortgage a home, have student debt and where you live.

RELATED: Suze Orman answers 22 questions on student loans, investing and retirement

“Own your own home. Get rid of your debt. Live below your means but within your needs,” said Orman in her signature no-nonsense tone.

She also recommends that people live in a state with no income tax. These seven states are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Orman herself calls Florida home, a state she recommends not just because it's income tax-free, but also because it's famously pleasant for retirees, with an assortment of retirement-friendly communities and activities.

RELATED: Student loan borrowers: Can you pass Suze Orman's test?

And no matter where you are in your career, it's important to understand what types of retirement savings accounts you have. She recommends having your money in a Roth IRA and/or Roth 401(k), rather than in a traditional 401(k), which can be deceptive.

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In a traditional 401(k), “what you see is not what you get,” she warned. “You will have to pay taxes on that. At what rate? We don’t know!" Here, Orman refers to the country's $18 trillion deficit. "How [is the government] going to solve it?" she asked. "[Politicians] can say they’re going to lower tax brackets but we don’t know that."

RELATED: Here's how to not outlive your retirement savings

A Roth IRA has an annual maximum of $5,500 for those under the age of 50, meaning you can’t deposit more than that amount per year (people 50 and over can donate an extra $1,000 per year).

$5,500 may not sound like a lot, especially when considering that many traditional 401(k) plans let you save hefty percentages of your annual income that could amount to much more, but that $5,500 can earn tremendously.

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Orman gave the example of a person who is 25 years old opening a Roth IRA and depositing $100 a month into it. 40 years later, you could have one million dollars.

In this case, the market would average you a 12 percent rate of return, which Orman said is a dramatic number, but not an unrealistic one.

“When you invest money and your money earns money, and that money starts to earn money, it compounds like a snowball down a hill,” said Orman. “It’s a financial snowball effect.”

RELATED: Suze Orman: You'll spend more in retirement than you do now

Using the same financial model and monthly contributions, someone who is 35 and opening a Roth IRA, ends up with $300,000. Ten years could cost you hundreds of thousands of dollars. Time is indeed precious.

“People, this is your chance,” said Orman.