Pay Off Credit Cards and Your Mortgage before you Retire.
One of the best ways to prepare for retirement is to pay off all debt. Many preparations need to be made before retirement. One of the best ways to prepare for this new chapter in life is to pay off mortgage and credit card debt. Many expenses need to be paid just as there is or was when working. Being on a fixed income requires more thought on maintaining a quality lifestyle during retirement. It is good to pay off all debt before retirement because other expenses can appear at any time. If for example there is a medical condition there could be many out of pocket expenses that Medicare and secondary insurance will not cover. Having debt can cause more stress for you and your family members.
Refinance Your Mortgage as a Way to Plan for Retirement
One good way to pay off your home is to refinance the mortgage loan. Consider refinancing your loan to a fifteen year low fixed rate mortgageIf you are fifty years old and have 25 years left on your mortgage. By doing this, you will pay more principal on your home. The best part is that you will have paid your home off ten years sooner. Your home will be paid off when you are 65 the average year for retirement rather than at 75 years of age. Without this debt burden imagine having the ability to travel or taking up a fun hobby.
Pay Off Your Credit Card Bills Every Month to Help Save For Retirement
Credit card bills should be paid off as well. Start using Visa or MasterCard bank check cards for charges. Credit cards tend to have higher interest than other credit products. Paying these debts off now will allow you to save more towards retirement.
Paying off all debt will improve your credit score. You should keep all your credit card accounts open. Do make charges from time to time, but pay the entire balance on every statement. This will keep your credit score at a nice high number.
Moreover, you need to track your spending. Maybe you shouldn’t just because you can afford it now. Look at things such as your cable bill. Do you need all the bells and whistles? Do you need to pay 100? A month on cable if you work over forty hours a week. Maybe a fifty dollar a month package will suit all your needs. Right there is $600.00 a year in savings. Not only that, but it could be six hundred dollars a year that will not be put on a credit card and could potentially be compounding interest for years. Do you like Starbucks? How about keeping that credit card in your wallet. Pay cash for small things because little things add up over time.
Retirement can be an exciting time. Paying off credit debt before retirement allows you to save. The more money you have saved, the more enjoyable your life can be.
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