When you finally reach your golden years, you don’t want to have to worry about any debts or mortgages hanging over your head – especially when you are on a fixed income!
It is important to clear any debts that you may have before you reach retirement age, while also saving money for retirement income at the same time.
These may be existing student loans, mortgages, general bank loans or credit cards – it can all add up, and if not properly managed they can last into your retirement years, potentially limiting your income and creating unnecessary and unwanted stress for you.
Meeting with a financial planning adviser means that you have access to expert advice on how to effectively save for your later years, and you will also be given a comprehensive strategy on how to clear your debt.
You may not have had a chance to clear all of your existing debt during your working years due to a number of factors: loss of income or job, financial dependents, emergency or unexpected costs, or failure of selling financed assets (property for example).
Tips for clearing debt
To help yourself in later years, try not to take on any unnecessary debt, or increase current debt. This may be finance for vehicles, credit cards, mortgages or general bank loans.
Cutting down on this as much as you can will help you to keep your debt to a minimum, resulting in better savings later. Instead of seeking finance, you could try to save money for things yourself.
You could also get rid of those credit cards and use a debit card instead – this way, you will be using your own money that is in your account rather than borrowing from a bank.
Paying off current debts in a timely fashion will also help you to stay on top of them. By meeting the repayments, you will be avoiding those horrible late fees or penalty payments.
It’s also a good idea to use your money wisely. If you receive some sort of extra money (such as a work bonus, gift or inheritance) then instead of splashing out on a new TV and surround sound system, you could use it to pay off a couple of credit cards.
If you can afford it, try to pay more than the minimum requirements in order to clear your debt faster. Credit cards should be first to go as they have very high interest rates.