Dealing with Debt before Retirement
Getting ready for retirement is an exciting time, but it’s also one that comes with a lot of important decisions. Where and how to invest your money is a series of critical choices that can determine if the next several years of your life will be filled with exotic vacations or more work. More importantly for most people, however, is figuring out where they’re going to get the money to invest.If you’re like most people approaching retirement, there isn’t a lot you can cut from your budget to free up money for investment and savings. Costs such as healthcare, housing, and utilities are pretty much fixed or always increasing, making it hard to find any place to make cuts that will save you a significant amount of money. Cutting back on discretionary spending is an option, but most people without children in the house know that that this is a relatively small part of their overall spending.That means that the only large spending area for many households is debt. Between taking out loans for cars, your kids’ higher education, and other expenses, debt levels for people approaching retirement are increasing rapidly. Fortunately, there is something that you can do about it.Debt consolidation loans are often sold as a way to help people who are in trouble with their finances get out of debt. While they can be used for this purpose, many people are discovering that it makes sense to use these loans to free up cash in a budget that can be used for investment. These loans pay off all of a family’s debt, then replace it with a single loan at a lower interest rate.Because of the lower interest rate and longer payment terms, it’s possible to cut the amount that you’re spending on debt repayment in half. Furthermore, every loan comes with advice from a debt counselor. This financial professional can review your budget and make suggestions to improve your personal finances. This can be valuable information for people who are looking to retire in ten years or less.Debt consolidation can be a good decision if you’re looking for ways to cut back on your expenses before retirement.