Debts You Should Pay Off Before You Retire

​Carrying debt into your golden years is a lot like playing football with a moving goal post. You never know when, or where, the game will stop because the goal post is constantly moving. If you want to be able to enjoy your retirement, then you need to put down a solid financial goal post. The following three tips will allow you to get a handle on your finances and stop the moving goal post once and for all.

​Credit Card Debt

Credit cards certainly add convenience to our lives. They can also make us rack up a considerable amount of debt, which gets compounded the higher you run up your credit card balances. The reason being, the compound interest case doesn't work in your favor when you have credit cards. Rather, the more you owe, the more interest will accrue. The more interest you accrue, the more you owe. It's a vicious cycle. Certainly, it's not a cycle that you want to carry into your retirement when you have even less income than you're going to have now.  DebtWave recommends paying more than the minimum payment as often as you can to get your debt down faster. Paying off your credit cards should be one of your main financial goals before you hit your retirement years.

​Mortgage Debt

Some people think that mortgage debt is good debt and therefore, they believe they don't need to worry about it. However, nothing could be further from the truth. Anytime you owe large amounts of money for anything, you are at risk. While you may not have to worry about losing your job during retirement, other factors, like your health, can come into play and affect your debt ratio. If you still have a mortgage payment and you have these added medical debts, or other emergency expenses, then you put yourself in a very vulnerable position during your retirement years. According to City Creek Mortgage, you should have a plan to pay off your mortgage debt within a set timeframe. Ideally, this time frame allows you to pay off your home with years to spare before retirement begins.

​Student Loan Debt

These days, the average amount of student loan debt that each student carries are about $30,000, give or take. Saving for College shares that for the last 10 years the cost of college has been increasing around 4% each year. No wonder Millennials, in particular, are saddled with student loan debt, which in turn has affected their ability to buy a home and to save for retirement. If you are one of the people who continue to have student loan debt, then you should also make a plan to pay down this debt before you reach retirement age.

Debt is damaging for a number of reasons, particularly if you are heading into your retirement years. Because your income is going to be more limited than it is now, you're going to have less money at your disposal. Getting rid of all of your debt before those years arrive counts as the best way to ensure that your golden years stay golden.

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