Sailing off into retirement debt-free is almost mythical for the senior American citizen. Between mortgages, medical care, household bills and auto loans, older Americans are barely staying afloat off their incomes as an alarming 67% of seniors reports an average of $586,797 worth of debt. While this isn’t how most citizens inching towards retirement envisioned spending their retirement age, golden age debt is a real dilemma.
How To Shake Off Debt In Retirement
Whether you’re on the brink of retirement or well into retirement age, it’s never too late to unload debt. Seniors that have found themselves chained to creditors can still embark on a journey to financial freedom whilst gracefully balancing the vagaries of their fixed income. Here’s how.
1. Budget And Prioritize Debts
Chances are you already have a budget in place; the question, however, is how well does your current budget integrate your credit woes? Start by taking stock of your monthly expenditure and running it against the money you’ve got coming in; this could be your retirement fund, pension, or social security. Once this information is locked in, highlight the areas of your budget that could do with a subsidy and channel those savings into debt repayment.
Tip: Prioritize the urgent and high-interest debts first.
2. Adjust Your Lifestyle
Frankly, this might not be the best time for those weekly dinner takeouts and annual vacations- you’ll have to stay a little more conscious about your pockets if you want to dig yourself out of that credit hole. Alternatively, seniors who aren’t ready to leave their endeared homes can always opt for a roommate instead. More often than not, you’ll find that these changes are pretty adaptable and yielding for this financial turnaround.
Tip: Opt for more home-cooked meals, selling that vacation home or downsizing to a smaller car/apartment for tremendous savings.
3. Stay On Top Of Bills
While your focus is primarily on paying off your debts, you do not want to neglect your regular bills- doing so will only throw you off track and build on your financial frustrations. In the case of existing loans, timely payments of the minimum amount will help you duck increased interest rates.
Tip: Pay your bills on time to avoid having them accrue into unmanageable debts.
4. Find An Extra Income Stream
While this might not be the ideal retirement scenario, picking up a part-time job or side hustle will speed up the debt-elimination process. Whether you throw yourself into consultancy or monetize your hobby, stretching your working life will lessen the financial burden of paying off your creditors, saving you that risky dip into your retirement fund.
Tip: Turning your skill into a stream generating idea should make it easier to a adopt to a second job.
5. Seek Help
Your efforts don’t have to end here;you can always reach out to a financial advisor or certified public accountant for a fresh perspective on shedding that debt load. Can’t afford a consultation? Take advantage of national finance agencies offering free advice to seniors; these professionals will walk you through possible solutions and strategies like debt discharge and consolidation.
Tip: Contact friends and family for assistance in accessing resources through this financial crisis.
Final Takeaway
Dealing with debt during retirement can be extremely overwhelming, the point of frustration often being extending the already spread out thin fixed incomes to meet credit demands, interest rates, living costs and soaring inflation. While there is no simple way around this conundrum, paying off debt inarguably sheds some of that financial weight off your shoulders. If this is where you’re at, the above-mentioned strategies should help set you closer to debt-free retirement and financial freedom; consider adopting a tip or two to beat those golden-age debts.