The Ideal Retirement is Debt-Free


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When it comes to retirement, most of us can't wait to get there. However, so many workers aren't taking the necessary steps to get there.

Retirement is when you can relax and enjoy life for a while. Or at least, it is supposed to be. However, if you aren't prepared, your retirement could be something much different than what you had in mind.

Yes, financial advisors will tell you that you need less money in retirement, because you have fewer job-related expenses. But you will probably replace these expenses with other expenses.

On average, it is estimated that you will need approximately 70% of your current yearly income when you are in retirement. For example, if you make $50,000 a year, you can expect to need at least $35,000 a year in retirement. However, this can change with different circumstances.

Your medical expenses will be higher. Insurance will cost more as you age. You often have increased medical issues. It is recommended that you take care of your insurance needs while you are young, in order to help keep your premiums down later.

You will also want to spend more money on hobbies, vacations and other activities. You know have time to do the things you always wanted to do.

If you enter retirement debt-free, you are reducing the amount of money you need each month. This may free up money for the things you want to do.

Start with taking the time to eliminate your credit cards. You should try to pay off all of your credit cards before you retire. It is estimated that 30 million Americans have bad credit due to excessive credit card debt. You want to enter retirement with options. If you have bad credit and have maxed out all of your credit cards, you have very few options. Remember, credit card debt can grow on you rather quickly. What is just $20 a month now, can turn into $200 a month in a short amount of time.

Move on to making sure that you do not have any auto loans at retirement. A dependable car is necessary, but you should try to pay it off as quickly as possible. Choose a reliable, reasonably priced automobile. You don't have to buy new and you don't have to spend every last cent you can afford.

One of the best things that my parents did was enter retirement owning their property free and clear. No mortgage. You have to have a home, but by paying it off before you retire, you are really freeing your budget up. For many people, the mortgage payment is the largest expense they have. Think of the things you can do without that mortgage payment. No matter if times get tough, you own your home. You can take out a HELOC or reverse mortgage if times get really bad. Owning your own home gives you so many options in retirement.

Think about it, if you only had to pay your utilities and living expenses, how much money would you have back in your pocket. Take the time to create a debt-repayment plan that focuses on being out of debt before you retire. Many people that eliminate their debt early find that they can actually retire earlier than planned. That sounds really good doesn't it?

Martin Lukac , represents , an Internet consumer banking marketplace. is a destination site of personal finance, investing, taxes and mortgage rates. provides mortgage guides and financial rates and information. also operates a financial portal #1 American Financial, found at


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