In the years and months leading up to retirement, the last
thing you need is a lot of consumer debt hanging over your head. When that “cloud”
of debt is there, you’re not going to feel or be financially stable, and that’s
unfortunate since retirement is a time when you should feel at peace and primed
for relaxation. Thus, if at all possible, you should pay off or at least pay
down your debt in the time
Not only will paying down your debt lead to a more
stress-free retirement, but it will also help you in other ways as well. To
begin with, when you’re paying debt, you’ll get used to having less spending
money. And, since most people, no matter how well they save and plan, end up
living on less during retirement, it’s good practice for the real thing, as
well as a good way to see what changes and adjustments you’ll need to make to
live comfortably during retirement.
On the flip side, however, if you can pay down all or most
of your debt now, you’ll be able to live on more when you actually do retire
since a large portion of your funds won’t be going toward consumer debt.
So, how do you get on the right track in terms of saving
money, paying off debt, and realistically planning for retirement? To begin
with, you’ll need to honestly assess how much money you’re going to need to
live in retirement.
Most people will require at least 70% of the income they
currently make, so aim for that. If retaining that much money while paying off
your debt during retirement is impossible, then you need to start paying as
much toward your debt as you can. And, even if it’s doable, paying off your
debt will still help you to come off on top in the long run.
To get started with paying off that debt, no matter how mounting
it may be, consider meeting with a credit counselor or accountant. Discuss your
goals and what steps you would need to take to retire debt-free or nearly
debt-free. A qualified professional can assess your current situation and help
you to come up with a realistic plan that will enable you to achieve or at
least get close to achieving your goals.
There are a lot more options and solutions out there for
paying off debt than most people realize, but an experienced credit counselor
will know all the tricks and choices for helping you to reach even those goals
that seem the most impossible.
The bottom line is that the less debt you go into retirement
with the better, so as soon as possible (ideally, around 5 years before
retirement), start doing your best, preferably with the help of a pro, to drop
down or totally eradicate that debt. #RetireWithoutDebt
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