Photo by Andrea Piacquadio

Being in debt during retirement is not what you dreamed of when hanging up the customary hat; it happens. 

While the average debt of Americans in retirement is difficult to calculate, baby boomers have an average obligation of $96,984. As people enter retirement with debt (or more debt than they had hoped), below are some tips to help you manage finances, tackle debt as a retiree and live the retirement you had anticipated. 

Add a routine back into your days by scheduling time to declutter.

Retirement brings something many individuals have not experienced since early childhood—no (or very limited) schedules to keep! Now that you are not clocking daily, you have more time to visit your friends and do the things you love, which you have always longed for. While others find themselves busier in retirement than they were in the prime of their careers, others have difficulty how to fill their time. If you have extra time in your solar day and are faced with more debt than planned, introduce a schedule to your day. Keep time for things you love, like meeting up with friends for coffee once a week, gardening, exercise classes, etc.—and add time for something you have been avoiding, like decluttering your house.

You may feel overwhelmed with the amount of stuff you have accumulated over the years now that you are spending much more time at home. Rather than diving into the mess day after day, consider going room by room for an hour a day to get things in order. Create a centralized organization hub for stuff you remove from each room. By doing this, one bin for selling, one compartment for donating, one for keeping (but moving to a different space of your house), and one for keepsake items you plan to pass on to your beloved (sooner or much later).

Replace (with lower cost) or sell things you are no longer using.

After you have had time to declutter your house, sell the things inside (and out) that you no longer need. Use the money from your sales to address some debt you have carried into retirement. While reviewing your items, big and small, take a good look at your more significant ticket items—like your vehicles, boat, or R.V. and your home—to see if it is time to downsize. When letting go of things you have had for years and worked so hard for (such as your house), take time to assess the pros and cons of each item and whether or not the sentimental value outweighs the opportunity to lower your retirement debt. 

Consolidate your debt.

Maybe you find yourself with a personal and mortgage loan or a personal loan and three credit cards. Take time to meet with one of the Real debt relief experts of the Law Offices of Ronald E. Stadtmueller to see if refinancing or consolidating your debt can help you reduce monthly payments and get out of debt sooner and start enjoying retirement more. We have a Bankruptcy Law Specialist in San Diego. P.S. If you did not set a budget before retirement, it is not too late to start budgeting now!

Meet with your financial advisor to explore your retirement plan options.

You may be able to pay off your debt in retirement by using proceeds from your retirement plan distributions, Social Security income, or pension income. Talk with your financial advisor to know what options you have available to you.

Bottom Line

Retirement is expensive. Experts estimate that you will need 70 to 90 percent of your pre-retirement income to maintain your standard of living when you stop working. Take charge of your financial future because planning is key to a secure retirement.

Further, if you are already saving for retirement or another goal, keep going! You know that saving is a rewarding habit. If you are not saving, it is time to get started. Start small if you have to, and try to increase the amount you save each month. And so make saving for retirement a priority. Devise a plan, stick to it, and set goals. Remember, saving matters! Thus, it is never too early or too late to start saving.

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