Managing debt and planning for retirement are crucial aspects of financial well-being.
A growing number of older adults are in debt in retirement. Among people ages 65 to 74, the share with debt rose to 65% in 2022, up from 50% in 1989. If you are among those whose debt is straining your retirement budget or you’re paying a high interest rate, a pay-it-off plan is key. Here are some top strategies for debt management and retirement planning:
Time your Social Security Benefits
Consider delaying the start of your Social Security benefits. Waiting until full retirement age or even later can result in higher monthly benefits, providing you with more income in retirement.
Consider Moving or Downsizing
Evaluate your lifestyle and consider downsizing if necessary. Cutting unnecessary expenses can free up funds to pay down debt and contribute more to your retirement savings.
Your home is usually one of your biggest expenses, and if you live in a high-cost area, you might be paying high property taxes and maintenance costs, which eat into your ability to pay for other things.
Pick up side work
Supplementing retirement savings and Social Security benefits with part-time earnings can make your money go further and help you pay off remaining debt. Remember, the key is finding a balance that allows you to address your debt while still saving for or living a comfortable retirement.