We’d all love to have hundreds of thousands of dollars in the bank on the day we retire, sure. But since many of us have tens of thousands of dollars in debt – for years – it can be difficult to envision a post-retirement free from debt. However, if you act now and start chipping away at that debt, you’ll be much better off for the future.
Saving for retirement is a necessary step toward securing your future for when you’re no longer working regularly. And one of the best ways to maximize your retirement saving is to better manage your debt while you’re working.
In order to secure a strong financial future, your best bet is to work with professional debt management companies and develop a succinct plan to get organized, create a strict (and realistic budget), and start paying off your debts.
Do-It-Yourself Debt Repayment Options
Of course, there are a few things that you can do – both right away and in the long-term, that will put you on the road to financial success. Here are some of the steps involved with a debt management and debt repayment program:
- Pay more than the minimum
- Use the Debt Reversal Pyramid
- Use your savings
- Cash out your life insurance
- Borrow against your home equity
- Cash out your retirement savings
- Ask for a little financial assistance
- Renegotiate terms with your creditors
It’s important to note that some of these do-it-yourself debt repayment options can lead to other financial concerns if you’re not careful. It’s best to talk to a debt consolidation and debt management professional before making a decision.
When to Start Selecting a Retirement Plan
Though it’s important to focus the majority of your efforts on a debt management program in the interim, it’s still wise to think about retirement. The sooner you choose a plan, the sooner you can begin saving money and earning on compound interest.
Many Americans are dependent on Social Security and Medicare in their retirement years, but these programs, while necessary for most, do not provide financial security. Not only can they potentially be taken away, but the average Social Security payment is relatively low, on average around $1,200 to $1,500 a month, while Medicare may not cover all health-related expenses. Planning for retirement will better allow you to manage your budget and live comfortably, whether that means paying off a mortgage, fulfilling a bucket list, traveling, or spending time with family.
Debt Management Program
Investing in your future provides a safeguard against financial hardships and gives you the peace of mind that you won’t become a financial burden on friends or family.
When planning for retirement, it’s important to look at the big financial picture now: What does your spending look like? What fixed payments do you have? What do your investments look like? What are your hopes for retirement? And how is your debt holding you back? Talking to debt counseling professionals can help you get rid of your debt and better prepare for a happy and financially secure future!