Retirement is meant to be a time of relaxation, travel, and spending quality time with loved ones after a lifetime of hard work.
However, for many retirees, debt can loom large and create considerable stress and anxiety. From credit card debt to mortgages, medical bills, and personal loans, debt can pile up and derail even the best-laid retirement plans.
The good news is that it’s never too late to take control of your finances and get on top of your debt.
As Stockspot’s head of client care and advice, Sarah King points out “it is possible for retirees to get on top of and even clear their debt in retirement.”
There are numerous ways for retirees to get on top of their debt and achieve financial stability in their golden years.
One effective strategy is to create a budget and stick to it, identifying areas where expenses can be reduced and where money can be diverted to paying off debt.
Retirees may also consider seeking financial counseling or advice from a professional to get a clear understanding of their options and create a personalised plan for managing their debt.
With diligence, discipline, and a clear plan, retirees can take control of their debt and enjoy a more secure and comfortable retirement.
King highlights the importance of putting together “a comprehensive budget and debt repayment plan” to get ahead of any debts that remain in retirement.
As part of their budget and repayment plan, retirees should put together a list of all their debts that include interest rates and minimum monthly payments.
“Retirees should prioritise paying off high-interest debt first and consider consolidating multiple debts into a single lower-interest loan,” King advises.
Additionally, retirees can look for ways to reduce expenses, such as:
Managing debt in retirement is crucial because it can have a significant impact on a person’s financial security during their golden years.
Entering retirement with substantial debt, such as a mortgage, car loan, or credit card debt, can limit a person’s ability to enjoy their retirement and create unnecessary stress.
High-interest debt can eat into a retiree’s fixed income, making it harder to make ends meet and forcing them to make difficult financial decisions.
However, proper management of debts “can reduce financial stress, increase disposable income, and enable retirees to enjoy their retirement years with more financial flexibility”, according to King.
For retirees who have been unable to avoid dealing with debt in retirement and may be struggling to make their repayments, King suggests that “they should first speak with their creditors to see if they can negotiate more manageable payment terms”.
“Retirees may also consider accessing any available resources, such as government support or seeking advice from a financial adviser,” King says.
By tackling debt head-on and seeking the right support, retirees can free themselves from financial stress and focus on enjoying the retirement they’ve worked so hard for.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.