Retirement is something to which many people look forward throughout their careers. However, retiring with debt can put a damper on your fun and games.
Combining financial obligations with a fixed income is a recipe for anxiety, unhappiness and a dearth of discretionary dollars with which to enjoy your leisure years. With this in mind, let’s take a look at how to retire without debt.
1. Stop Charging
In the final decade or so leading up to your retirement, the smart play is to wean yourself off of credit cards. This will save you much money in terms of interest payments and it will make you think twice before shopping on a whim.
Do yourself a quick favor and look through your closets, garage and attic. All of those things sitting there gathering dust? Yeah, they used to be money. And, they still could be money if you’d been a bit more discerning about your purchases.
Credit cards make it too easy to buy impulsively.
Stop using them — and pay them off.
Florida is one of the most popular states for retirees. Among the best debt relief advice for Floridians is credit card debt consolidation. But that’s just one of many debt relief options out there to consider. Look around and find one that will work within your timeline and your budget.
2. Buy The Last Car You’ll Ever Need
Somewhere within the last seven or so years before you retire, if you haven’t dome so already, buy yourself (do not lease—buy) the last car you’ll ever need. Purchasing it at that point means it will be paid off when you retire. Choose carefully, because it should be something with which you’ll be happy from here on out.
Make sure it’s reliable, so you don’t have high maintenance costs and make sure it’s economical, so you don’t have to spend a whole lot of cash to fuel it. An electric car is a good idea if you live in a house or a condominium complex with ready access to a charging station.
And yes, we know we said stop charging above—but that’s different OK?
3. Get a Smaller Home
Odds are your kids are grown and gone. This means you don’t need as many bedrooms in your home as you did when they were growing up. Putting the house up for lease will give you a steady stream of passive income, which can help offset the payments you’ll make on a smaller place.
If the idea of being a landlord doesn’t appeal to you, sell the house and use part of the proceeds to acquire something smaller, newer and more easily managed. Some experts recommend renting a place, rather than owning, as it will free you of property taxes and maintenance costs.
4. Start Saying No
Younger relatives, seeing you living comfortably, might be tempted to consider you the family ATM. Watching them struggle will tear at your heartstrings and you will be tempted to help them out financially. Requests might come in the form of a loan to tide them over, or cosigning for a large purchase. Thing is, those loans sometimes go unpaid and co-signing often ends with you making payments on something you never wanted, nor need.
Just say no.
Yes, it will be difficult, but things will be even worse if they default on the loan. More family animosities have been fomented over financial issues than pretty much any other cause.
Plus, you’re going to need all of your dollars to live.
5. Mind Your Health
Start exercising regularly if you have yet to do so. Learn all you can about nutrition and adjust your diet accordingly. Cut your sugar and salt intake drastically.
Find an affordable health insurance plan into which you can buy before you retire, to help keep premiums down. Medical debt has sunk many a retirement dream. Do everything you can to help your body avoid illnesses and fight off disease.
These five tips on how to retire without debt will help you retire debt free and keep you that way—so you can enjoy that hard won time to yourself.