Each month when you pay your bills, you may shake your head and mutter about your seemingly endless debt load. It’s a common reaction when a stack of bills arrive in the mailbox. But for nearly one in five Americans, it may be the literal truth; A recent study found that 18 percent of Americans don’t expect to ever repay their debts. Another 25 percent expect to be in debt until at least age 61.
What’s behind all this pessimism? It’s probably a variety of different factors coming together to create an overall feeling of financial doom and gloom.
- Mortgage delinquencies hover at 3.36 percent
- Credit card debt has increased over 2013’s numbers
- Total student loan debt has risen to $996 billion dollars
- Average student loan debt per person is over $30,000 in six states
- The job market is improving, but not as quickly as everyone had hoped
- Salaries are not increasing as expected
Since a heavy debt load can have a negative impact on your retirement lifestyle, it’s smart to make a plan to pay off debts before you retire. As you plan for retirement, include a debt repayment solution in your monthly budget. Meet with a credit counselor if necessary, and go over your options to repay your debts faster. In some cases you may be eligible for special loan programs or even student loan forgiveness.
Another factor to consider is the legacy you leave to your beneficiaries. The last thing anyone wants is to leave behind debts after their death. When you meet with your estate planning attorney, talk about your debt load and the impact it will have upon your estate. Formulate a plan to pay down debts and protect your beneficiaries.
Communicate these concerns to your financial professional. Most of retirement income planning revolves around growing your assets, but preservation of your lifestyle is also important. If you pay down debts before you stop working, you can enjoy a worry-free retirement and a more comfortable lifestyle.
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