If you’re approaching retirement, one of the last things you want on your mind is debt. If that’s credit cards, your mortgage, or vehicle debt, it’s important to have a plan of attack so you can enter your retirement years with a little less on your mind! Here are just a few steps you can take to start minimizing that debt so you can have some more disposable income on the things that matter to you.
Take a look at your month-to-month debt expenses and compare to your monthly income. From there, you can write out your necessary expenses to discover if there are any gaps in your current budget. If you have any surplus in your budget, consider putting those funds toward one of your debts.
List your debts from smallest to largest and begin attacking that smallest debt first. Once this debt is paid off, take the money you’d put toward that smallest payment, combine it with the payment you make for the next smallest debt, and start paying off the next debt in line. This tactic is what some call a “debt snowball.”1 This isn’t the only way to pay off your debts, but it’s simple to follow.
There’s a good chance you have a lot of moving parts to your finances. From retirement contributions, to debts, to whatever else might be in your portfolio, everyone is different. It may be of benefit to meet with a professional with the tools and insight to help you create a custom debt payoff plan that works alongside your retirement needs.
If you’re working toward fewer debts in your life for a less stressful retirement, meet with a financial professional in your area today! To discover more on working toward your retirement goals, register for a local American Retirement Institute course with one of our educators!