It is only possible to truly retire if you are debt-free. If you still owe money when you reach retirement age then, depending on the amount owed, you may still need to work at least part-time, and sometimes full time, in order to continue to pay it all off. Retirement should be about enjoying life and doing all the things you couldn’t do when you were working, so it is ideal if you can pay off your debts before you reach your retirement age. Here are some great ways to have a debt-free retirement.
Stop Borrowing, Start Saving
Using credit cards and borrowing on finance options to buy items is an ever-growing habit for people. The problem comes when the payments become too much to deal with, or when you stop working and can no longer service the debt. The key to a debt-free retirement is to set a limit on your credit borrowing; when you get to a certain age, you should stop and concentrate on paying off the debt rather than accruing more. The age you choose will depend on when you wish to retire. When the debt is paid, start putting the money you would have spent paying it off into a deposit account instead.
Be Honest
Don’t wait until you have retired, to be honest about the amount of debt you have. It can be easy to have a lot of debt and not really notice or understand it because you are so used to paying off the minimum amounts each month. Add everything up so that you have a final total which you can work to pay off more quickly. See which cards and payment plans have the highest amount of interest attached to them because these are the ones that should be paid off soonest. If you really need help, then seeking advice from bankruptcy lawyer Larry Price Law could be a good next step.
Buy A Car Outright
Having a car is something that many people could not do without, but car payments each month can be hefty. Add to that the gas, insurance, taxes, and general running costs, and it soon adds up. Although many of the costs of running a car can’t be changed, the car payments themselves can. Rather than buying a car on a payment plan, pay for one outright. It will be a larger amount upfront, of course, but once you have the car, you won’t have to pay anything more for it. It will save you a lot of money each month.
Downsize
If you still owe money on your mortgage which won’t be paid off by the time you retire, downsizing can be a great option for you. Selling your current home and buying a smaller, less expensive one should mean that you can live mortgage-free, and hopefully still have some money from the sale leftover. That money can be used to pay off any remaining debts or used to find a fantastically enjoyable retirement.
So these are some ways to have a debt-free retirement.
