Today, eight in 10 Americans are living with debt. Many do expect to retire with huge amounts of debt, and eventually perish being indebted. However, there is one group today that is already facing unprecedented levels of debt: Baby Boomers.
As they begin to retire, they’re noticing that they have a net worth that is at close to zero or in negatives because of all the debt and liabilities they’ve taken on. With a majority of seniors saying they have to rely heavily on Social Security, it’s safe to conclude that they won’t be able to pay off the debt.
So, how can a senior cope with the debt? Newsmax Finance has a terrific article that lists six ways to cope in retirement with debt:
- Get zero (or five percent) unsecured debts.
- Don’t pay extra on the mortgage.
- Downsize your transport.
- Rent in retirement, save the cash.
- Start to work part-time.
- Work an additional three years.
The author, Richard Rosso, writes in the piece:
As a youth, I lived in a three-story Brooklyn walk-up with 36 apartments, 36 doors. We lived on the first floor. Apartment 1A. Every door was lead-painted a dark green (almost black), except ours. Our entrance was blood red. Mom’s favorite color.
I remember how much that door stressed me out. It wasn’t supposed to be red. It drew too much attention. It was nerve-wracking to live behind the red door.
The entrance to retirement may not be pretty; it may be stressful, different, and even scary.
However, you still need to open that door, walk through the portal and deal with what’s on the other side.
Planning for a completely debt-free retirement may just not be feasible today.
In those Brooklyn days, my family made the best of limited financial resources. My mother made her front door stand out and embraced the difference.
Pulling the trigger on retirement is not about waiting for everything to be perfect. It’s about maximizing as best as possible what you already have.
And that was one of the greatest perspectives I realized during the Great Recession.
Another stupid article, what a waste of time reading this stuff.
Everyone knows high interest credit card debt is a killer to all budgets and should be done away with way before retirement.
Have the Mortgage paid off before retirement.
Downsize of course, but I did that in my 50’s when my number 4 child left the nest.
Rent in retirement??? In almost every area I have checked, rent costs way more than owning with the low interest rates.
Plan and have your house paid off before retirement – saving hundreds of dollars per month.
Work part time, work an extra 3 years???? The whole point of retirement is to stop working and enjoy what years you have left.
I quit working at age 50. My wife and I live well on a $1,637 per month pension and will be getting an additional $1,150 per month in Social Security at 62, in 23 months. We will then have 60% of our monthly income left after all our bills are paid. Including food and life insurance. $1,720, Left in the budget each month.