During youth, we often assume we’ll have plenty of time to pay off our debts. As part of a solid financial wellness plan, we know it’s important to become debt-free, but we put it off for another day. Unfortunately, the years can pass all too quickly, sometimes leaving retirees with more debt than they’d ever planned to have.
How Much Is Too Much?
Whether it’s a home, car, or the $30,000 you charged on your credit cards in your 20s, debt is a part of everyday life. However, if you look at the monthly amount you pay on those debts, you can see that it will be tough to sustain once your income is substantially less.
The best way to determine how much debt you’ll be able to handle during retirement is to be fully aware of the amount you pay toward debt. Make a budget detailing all of your expenses and be honest about where you can cut back. Eliminating debt will make it much easier to do all the things you want to do on a post-retirement income.
Debt During Retirement
Two-thirds of Americans between the ages of 65 and 74 have some kind of debt, so if you’re still owing at retirement, you won’t be alone. It isn’t the end of the world, either. If possible, you may want to delay retirement a little longer to pay off more of those debts, but you can also try refinancing your house or shrinking down to one car to share with your spouse.
As you try to pay down any debts, focus on those with the highest monthly payments first. This will help make it more manageable. You may even be able to take a fun part-time job to continue to pay off that debt once you’ve left the nine-to-five behind.
Part of managing your financial wellness means making sure you can afford your monthly expenses during retirement. Since your debts can cut significantly into whatever income you’re bringing in, you may find that the more you can do to pay them, the better off you are. If you have any questions about pursuing your retirement goals, contact us online or call us at 1-888-968-9168.
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