According to the National Foundation for Credit Counseling (NFCC), almost 1/3 of its consumers who’ve filed for bankruptcy were either aged 50 or more. This implies that financial planning is crucial for people of all age and that they are not just meant for the baby boomers.
So, if you want to retire without any debt, then you need to find out the ways to get rid of all your monthly financial liabilities well before your golden days set in.
Tips to retire debt free
Paying off your debts should be right on top of your priority list as far as retirement planning is concerned:
- Delay your retirement – Ideally, you should opt to retire when you have no debt liabilities left in your name. So, you should consider extending your career for few several more months or even years just to get rid of your financial liabilities. In addition, the more you work the greater will be your savings and so, your savings fund will last longer.
- Decrease your retirement savings – You should be careful while heeding this advice. This is due to the fact that retirement plans act as a source of income for the retirees and so, if you fail to contribute towards those accounts, then it’s very likely that you won’t have a substantial amount savings or rather a steady source of income during your golden days. Take for instance, you have been reeling under high interest credit card debt and your financial condition is not allowing you to make extra payments, then in that case you may reduce the amount of contributions you are making towards your retirement accounts and instead, pay off those revolving debts first. However, an astute financial planning professional may help you in this regard.
- Work part time – Hopefully, you’ve given up your habit of spending impulsively and that you’ve been trying your best to tame the spiraling debt from going out of your control. However, it is very likely that you may still go through some of sort financial constraints to carry on with your debt repayment plans. In that case, you should think of taking up a second job or work on the side in order to increase the amount of disposable cash at your hand so that you can pay off your debts aggressively. For that reason, you can monetize your hobby or take up additional assignments in order enhance your chances of making fast money but in an easy way.
- Relocate to an affordable accommodation – You must have come across several retirees who had plans to relocate to a smaller or cheaper place after they retire. However, those plans are too good to be true. In reality, most of the baby boomers weren’t successful in selling off their homes during the housing crisis and so, they were stuck with their existing property and had their plans stalled.
So, the best trick out here in this case it to cut down the size of your abode now and increase your chances of selling the property when favorable market conditions reappear.