- If paying off your mortgage is out of reach, but you have equity, you might be in a position to sell your current home and use the proceeds to purchase one your equity will cover in full.
- Get into the habit of paying cash for everything so you won’t have financial obligations hanging over you.
- Offers to invest in business deals should be viewed with a great deal of scrutiny.
With the “beginning” line coming into sight, your long-awaited and doubtlessly richly deserved retirement is right around the corner. While a lot of people tend to view this as the end of your career, it’s actually the beginning of the next phase of your life.
As such, going into it as debt-free as possible will help make it one of the best periods of your life too. Long story short, these steps to take to eliminate debt just before retirement will help you preserve your cash for living expenses rather than using it to service debt.
Eradicate or Reduce Housing Costs
If you bought your home and your mortgage is just about paid off, make it a point to finalize payments on it while you’re still earning. If paying off your mortgage is out of reach, but you have equity, you might be in a position to sell your current home and use the proceeds to purchase one your equity will cover in full. This will help you minimize costs associated with your home. You might even consider moving into an apartment community to eliminate property taxes and ongoing maintenance expenses.
Stop Charging — as Much as Possible
The more you charge, the steeper your mountain of debt becomes. Get into the habit of paying cash for everything so you won’t have financial obligations hanging over you. Do everything possible to get rid of debt before you retire if you already have some.
In extreme cases, this might mean availing yourself of professional help like credit counseling or debt settlement. These Freedom Debt Relief reviews will help you get a feel for what to expect from such a resolution program.
Pay Off Your Car
Now is the time to pay off your car loan so you can save the money you were putting toward the monthly note to cover maintenance to keep your car in good shape. It’s also time to revisit the nature of your household transportation needs. Perhaps your spouse and you can get by with one car to share as opposed to two, given the need to commute to work is about to be in the past. You’ll save money on registration, insurance, fuel and maintenance.
Satisfy Student Loan Debt
Hopefully, your own student loans haven’t dogged you this far into your postgraduate existence. However, you should pay them off now if they have. In most cases though, people at this stage of life are paying off loans for their children.
If retirement is imminent and there’s just too much of it to pay off beforehand, inform your progeny the time is coming when they’ll need to cover it on their own. Yeah, we know this sounds like less than ideal parenting, but your alternative could well be insolvency.
Start Saying No
As hard as it’s likely to be, it’s time to start declining pleas for loans from family members and friends. And yes, this also includes requests to co-sign loans, apartment rentals and car leases. Offers to invest in business deals should be viewed with a great deal of scrutiny as well.
Opportunistic people will come sniffing around your stash of cheddar to see if they can get you to break them off a piece to fund their needs and desires.
If you can see it’s an absolute necessity and you can comfortably afford the amount in question, consider framing it as a one-time gift to help the person asking for assistance through the rough patch. This negates the potential for hard feelings if repayment isn’t forthcoming and it makes them reluctant to ask for more.
These steps to eliminate debt just before retirement will help you make your nest egg last. In fact, they could well be the difference between enjoying your post-career years and struggling to maintain your lifestyle on a fixed income.