If you are close to retiring this article is perfect for you. Here you will find the best tips to have a debt-free retirement. Keep reading to find out all the details!
Are you closer to retirement? If so, you must read on. Here you will find the best tips to have a debt-free retirement. Keep reading to find out all the details!
Nobody likes the idea of carrying significant debt in retirement. These tips may help you pare down what you owe, whether you’re just hitting middle age or you’re entering your golden years.
The closer you get to retirement, the heavier a burden debt can become. Every dollar you pay to a lender is one you could spend on living expenses, vacations or a legacy for your children. You don’t need to retire debt-free, but downsizing what you owe before you stop working is a good idea.
Nothing eats into your retirement savings faster than debt with a high-interest rate, and credit card debt may be at the top of this list. If you carry credit card debt, try to pay more than the monthly minimum and, if possible, allocate extra money in your budget to paying off your cards as quickly as possible.
Once you cut down outstanding credit card balances, do the same for other non-tax-deductible debt you may be carrying, such as auto loans. Although retirement is still decades away, you may be close to the height of your earning power and thus have more income to put toward eliminating your liabilities.
At the same time, continue paying attention to your other goals, particularly saving for retirement. In fact, it may make more sense to use available funds to maximize contributions to your retirement accounts rather than pay off tax-deductible debt such as mortgage interest.
Finally, once you turn 50, you’re eligible to make increased annual contributions to your 401(k) and IRA accounts. You may want to take advantage of this higher limit.