Irrespective of what age you are, you must have found yourself dreaming about retirement, thinking of traveling with your spouse and grandchildren, on a white sandy beach, sipping umbrella drinks and volunteering with your favorite organization. If you were to live in an ideal world, retirement would be everything that you want it to be. But next time you catch yourself day-dreaming about retirement, think of it with a slight twist! Try to think how retirement would look with some major debts hanging over your head? Can you dream of retiring debt free? Yes, high interest debts could set back your retirement goals and can steal all the excitement that you were planning to have in your retired life. If you are someone who is planning your next vacation, think twice about whether or not this is more important than retirement planning. Here are some retirement planning tips that you need to know when you’re keen on living a life sans debt.
1. Budget your money habits:
Are you a spender or a frugal saver? Analyze your money habits and determine how much you spend every month. If you think you will overspend, it’s time to reduce your expenses and also change your lifestyle so that you might end up saving a huge amount of money for your post-retired age. If you don’t take this step, you will soon find yourself drowning in a sea of high interest debt and then you will spend majority of your “retired” life working continuously.
2. Develop a rock solid financial plan:
Figure out your financial goals and know how much time you may take to reach them. If you have your own timeline, you will be able to know whether or not your goals are realistic. Repay your unsecured debts so that you can save your dollars on the compounding interest rates and be able to save more for retirement. Pay down all your debts, especially those that carry outrageously high rates as these are the ones that land you up in a mess in the near future. You might also get help of a credit counselor who can help you with effective debt management skills.
3. Don’t raid your retirement savings account to pay off debt:
There are many people who choose to raid their retirement savings account when they have no other option to pay off debt. But this is a bad idea altogether as you will incur penalties when you withdraw them before your retirement age. There are different other debt relief options that you might take resort to when it comes to getting out of debt.
4. Consider working longer:
In case you see that your debt level is too high, you should consider working longer. You might not feel like working for a long period of time but when it comes to securing a debt free life, you can give it a try! Getting a second job may be tough, but being debt free is not easy. The longer you work, the more you can save for your retirement.
So, when you have retirement planning on your mind, take the effective steps mentioned above. Debt can spoil all your efforts to secure a peaceful retired life. Get rid or your debt as soon as possible and get help from a certified financial advisor if needed.
About the author : This post has been contributed by Stewart Bradley, a writer associated with the Debt Consolidation Care Community. He holds his expertise in helping people in debt problems. In this post he has discussed about retirement planning to lead a debt free life.