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Tips for a Debt Free Retirement
Author: Christina Costa  | Posted: 23-07-2008 | Comments: 0 | Views: 7 | Rating: (112)  (?) 
Whether your retirement seems decades away or just around the corner, it is something we have dreamed about at one point in our lives.
Have you had the daydream where you give that final notice and within weeks are on a plane to somewhere tropical to start your vacation for the rest of your life?
Also known as the "golden years," retirement might not seem so golden if you find yourself with a mortgage to pay off, medical insurance, auto loans, country club expenses and the cost of living.
Typically, retirement means that you will need less money since your professionally expenses (lunch, clothing, parking, gas, etc.) are now eliminated. However you need to consider that there are other expenses that just might take their place.
It has been estimated that the average American is going to require around 70% of their income earned (in the peak years) for their retirement fund. So let's say you were making $50,000 a year, now you are going to need about $35,000 in retirement to survive. This may seem like a lot, but take a few things into consideration.
Your medical expenses are going to be higher now because you are older. Now that you are not working, your insurance from your employer is gone. So lets look at a family (of two for example) might have a co-pay of $10 to $20, well their monthly medical expenses could be up to $1000.
Think about all the free time that comes with retirement. You know that has made its way into your dreams, heading out for a 10am tee time or brunch with the girls. The leisure expenses can add up as well.
While working, your monthly expenses probably include a mortgage, insurance, automobile payment and insurance, utilities, food and credit cards.
Some of these expenses will carry over into your retirement. Think insurance, utilities and food, things that you pretty much need to live. Now there are expenses that you can pay off and live without, like the credit cards, mortgage and auto loans. This should be your main priority to focus on before retirement so you can start off debt free.
Credit cards are probably your worst enemy. Start there and get it out of your life. You absolutely do not want to enter retirement with credit card debt and if you do, work now to minimize that debt. Managing your debt has become a huge problem for Americans. Approximately 30 million Americans are struggling with bad credit and that is usually due from credit cards.
Take the time now to analyze your debts. Come up with a plan to get out of debt and pay off all of your credit cards. You will be happy you did.
If you still have an automobile loan or loans, try to get it paid off before retirement. Next to credit card debt, you really don't want to have a car payment at this point in life. Of course you need a car (think of all that free time that comes with retirement) just make sure to come up with another plan to pay off that car in full as well.
Now for the biggest expense in your life, the mortgage. Of course you need a place to live. That is unavoidable. If you start now, and make extra mortgage payments every year then you will be working to get rid of it. Let's say you are paying $1000 a month, at the end of the year send them an extra $1000. Or you could break that up into smaller payments each month.
If you have a 30 year loan this method can reduce your mortgage term down to 23 years. Once you have paid the mortgage off that will eliminate your biggest expense, and in the future if you absolutely have to, you can take out a reverse mortgage.
Just remember that a lot of parents will start saving for their kids education before getting out of debt. Keep in mind that your children actually have a stronger earning potential than you do! Your ability to work in this fast-paced, quickly changing world with a high paying job is not as likely as your children.
Also, a good credit rating at this point is really important because you want to be able to use that towards any credit application in the event of emergencies. Getting rid of your debts before retirement will guarantee that you are in good standing.
Debt relief is available for those who need it. If you want to settle your debts before entering into retirement, there are companies who can help. They can negotiate on your behalf and before you know it, you will be on your way to financial freedom. After that, you will be living in retirement, not only stress-free, but debt-free as well.
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By: chrisdabutch | 09-09-2008
Got a question aboutMoney? Type your question here...im just getting back on my feet with an income again i wasnt able to pay my mortgage in about 14 months im in foreclosure, if filed chapter 7 a while ago, i lost one investment property in mid april,should of been in the street july but indy mac bank got all screwed up which bought me some more time in which im currently working 3 jobs to get back the income that i was making after beeing self employed since 1994.went through divorce and every other good thing that comes with that.i want to keep my home if they? the bank are willing to lower the debt on the house to market value and give me a fixed product to move fwd. with my life.. i ow 612,000 on motgage + the 14 mos i didnt pay on mortgage So confused in what to do n what Who to speak with to restructure this loan? help? Chris from Stamford Ct.
Is a 125% HELOC still viable for people w/excellent credit scores and only a little equity in the house?
By: dygtolbert | 08-09-2008
My husband and I both have Excellent credit scores; we bought our 3rd house a year ago this month. I would like to get a HELOC with a 125% ltv. I want to consolidate debt and want a little extra for home improvements. I have already figured out we would save more than half on monthly debt payment, thereby increasing cash flow so I would be able to better use the HELOC to my advantage on my own terms. However, because of the current housing dilemma (which I think is at least half their fault) and because we have only had the house a year, we don't have enough equity. Are there any banks out there still willing to go on past financial history and current credit scores to give us this equity option? (I don't like to be denied because of the current market which is not our fault, and also be denied because we've only had the house for a year)...
Can you provide an e-mail with retirement seminars ...
By: Antonio Perez | 08-09-2008
Can you provide an e-mail with retirement seminars for members during the 2008-09 school year. The could include HUDSON, BERGEN OR ESSEX COUNTIES. My e-mai is aperez144@aol.com. Thank you,
A Perez
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What Is The Difference From Yhe White Coffee Filters From The Non White Coffiee Filters?
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By: RaeKing85 | 08-09-2008
I wont to buy land and put a house on it but wonted to wait and see what the bail out does to the market is that smart?
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