9 Ways to Approach Retirement Debt-free

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9 Ways to Approach Retirement Debt-free

Should you be worried about your existing credit card debts as you march on to retirement? Yes, you should because carrying debt in retirement is a no-no.

Your credit card debt can make your retirement life utterly miserable. The stress related to the debt along with the costly medical bills can ruin your life in retirement. Unfortunately, 70% of baby boomers are in credit card debt and not sure that they will ever be able to get out of it. Because they didn’t try to pay off their pre-retirement debt.


How can you ditch your outstanding credit card bills to enjoy debt-free retirement?


  1. Start living within your means

Most of the people are now living beyond their means. They consider credit card as a free money. To fulfill their wishes, they swipe their credit cards randomly and are not bother to pay the bills on time. As a result, they fall into credit card debt traps.

The habit of using credit cards recklessly prevents them to grow savings or make investments to secure their retirement.

Thus, people have no other choice to live with credit card debts and carry the debt to their retirement.

So, you should be careful about your spending nature right now. If you are nearing retirement, then ditch all the unnecessary expenses to save as much as possible. It will help you to make lump sum payments to your credit card debts.

By doing so, you can get out of your credit card debt before you retire. Isn’t it great!


  1. Avoid signing up for credit cards randomly

Credit card companies in the market sell their credit cards by featuring various offers and rewards. You shouldn’t sign up for multiple credit cards to grab the offers.

Shop around to compare the prices and interest rates between different credit cards before you decide to purchase one. This will help you choose the best credit card as per your needs.


  1. Avoid ignoring the credit card bills

The major drawback of using a credit card is that you are charged high-interest rate if you cannot pay off your outstanding credit card balances on time. Thus, it is important to pay the credit card bills in full and within the stipulated time. This habit will help you to stay debt free forever.


  1. Pay off your credit card debt as soon as possible

Try to pay off your existing credit card debts as early as possible before you retire. Ignoring credit card debt can damage your credit score and create many other financial issues.

You can either pay off your credit card debt by making larger payments or opt for a professional debt relief service.

You can also use your tax return to make larger debt payments to become credit card debt free sooner.


  1. Convince your creditors for lower interest rate


If you have maintained your credit card properly, you can qualify for a lower interest rate for your current outstanding balance. Try to talk to your creditor by saying the financial hardship that you are facing to get a reduced interest rate. It will help you to pay off your current debt easily.


  1. Take advantages of 0% interest rate card to pay off your debt


If you have excessive credit card debts to pay off, you can transfer your credit card balances to a card, which has an introductory 0% interest rate.

After you transfer your outstanding balance to that card, you should pay off the balance within the introductory rate period to avoid paying a high-interest rate.


  1. Review your credit card statements and credit report


You should check your credit card statements on a regular basis. It will help you to understand whether or not there is any sign of fraud or illicit purchase. If you notice any unauthenticated or mischevious charge, contact your credit card company as soon as possible. Equally, you have to check your credit report time to time.


A single error in a credit report can hurt your credit score. You should dispute the error with the 3 major credit bureaus (Equifax, Experian, and TransUnion).


  1. Cashing in your life insurance policy

If you are nearing retirement and drowning in debt, then you can consider borrowing from your cash-value permanent life insurance policy to pay off your existing credit card debts. However, to get the benefit, you must have a cash-value life insurance policy, not a term policy. You can utilize a part of the cash value to become debt free and still leave apart of cash accumulation balance for retirement income.


  1. Avoid using credit cards randomly


You should use your credit cards when you face an emergency situation. You should change the habit of swapping your credit cards every time you feel to do so like purchasing groceries, school supplies, and party supplies. This will result in increasing your debt problems.

Credit cards are said to be the essential needs of the people when you need cash in an unexpected situation. Avoid using it every time you have a shortage of cash.

Lastly, you should try to grow your savings to enjoy your retirement days wholeheartedly. Don’t rely on the Social Security benefit solely. Manage your money efficiently so that you can avoid falling into debt problems in your retirement.

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