The future of retirement may look a lot different than our parents or grandparents have experienced. Student loan debt is considerably higher along with other inflated markets than for previous generations. To simplify the retirement equation right off the bat, we’d like to share some tips about how to eliminate debt before retirement.
Eliminate Debt Before Retirement
Get organized. Make a list of every payment and include the total amount that is still owed as well as the interest rate. It’s important to see these numbers on paper and watch how quickly they add up. Consider printing out this household budgeting worksheet to tally up your spending.
Make a debt elimination plan. There are various ways to do this. You may have heard of the debt avalanche and the debt snowball methods before. Both methods focus on paying as much as you can toward one of your debts while making the minimum payments to the others. They are both very effective for debt reduction. Here is an infographic comparing the two.
Set a goal and track your progress. Watch as your debt gets smaller and smaller. Soon enough your debt will be gone, and you can focus on your retirement.
Plan for the unforeseen. In the process of eliminating debt before retirement, it is always a good idea to plan for the unforeseen. Do you think there is a possibility you will stop working? Do you see any medical expenses coming your way? Is your family expanding? All these changes call for more spending money hindering your debt elimination process.
Your net worth will be of a much greater value to you when the amount of debt you owe is near zero. Imagine being debt free by the time you really sit down to plan your retirement. Bliss!