Dealing With Debt in Retirement

Dealing With Debt in Retirement

You might dream of traveling, playing golf, or spending time with your grandchildren?when you retire. Unfortunately, you’re probably not dreaming about paying off your debt. Ideally,?none of us would be worried about debt in our later years. Unfortunately, the reality is that half of us?will have obligations in our retirement years. So what are the options for dealing with it?

Options for dealing with debt in retirement:

1. Ensure that you know all the benefits you should receive. Benefits help with utilities, food, health care, and other items.?Check with the National Council on Aging to explore all the options available to?you.

• Avoid being bashful. You worked all of your life and deserved these?services. Every little bit helps and leaves more money for debt payments.

2. Consider cutting back. It might be time to downsize your lifestyle like anyone else with more bills than income. A smaller, less expensive house can save a lot of money each month. Also, ensure your entertainment dollars aren’t wasted. Make?every dollar count.

3. Consider your retirement expenses before retiring. Consider the lifestyle you’d?like to live and calculate your payments. Most retirees are surprised by how?much retirement costs. They fail to account for the cost of enjoying the time?they previously spent working.

• You probably don’t want to sit at home all day. Going to the movies, going?out for lunch, traveling, golfing, and shopping all cost money.
• Project your expenses and determine how much money you’ll have left?over each month for your debt.

4. Work for a few more years. There are always options if you need to continue?working. A few extra years can make a huge difference. Your current investments?have more time to grow. You can also avoid dipping into your savings.

5. Refinance your home. If you have much equity in your home, consider pulling?it out with a refinance. Then, you can invest that equity and use it for paying your?debt or living expenses. But, again, be wary of adjustable interest rates. Again, predictability may?be more critical for your situation.

6. Pay your mortgage more quickly. If you’re still working, make extra payments?on your home to eliminate the mortgage as soon as possible. Imagine how nice it?would be to retire without a mortgage payment.

7. Consider a reverse mortgage. There are many rules and regulations regarding?this type of mortgage. However, you can live in your home and don’t have to?make payments as long as you live in the house. It’s essential to educate yourself?before considering a reverse mortgage. Consult with an expert.

8. Consult with professionals. If you have excessive debt and minimal income, a?financial expert can significantly assist you.

9. Consider bankruptcy. Whether this is a viable option will depend on your state?of residence and your financial situation. For example, some states will permit?you to keep up to $1 million of equity in your home. Others only help a few?thousand dollars.

• If you have excessive consumer debt and minimal assets, bankruptcy?might be an option. However, consult with a knowledgeable bankruptcy attorney before taking action.

No one likes to think about dealing with debt in their later years. However, statistics?show that roughly 50% of retirees have considerable obligations. So get started today and?prepare for the future. If you’re already retired, consider getting an expert opinion?regarding your debt. There is often a solution you never thought of.