3 Tips for Tackling Debt
The transition from employment to retirement can certainly conjure mixed emotions for any aging member of the workforce, since newfound personal freedom comes without the comfort of a steady paycheck.
Preparing for the unknown in advance is a great way to maintain stability, especially with debt among seniors on the upswing and the ever-fluctuating costs of taxes, utilities, and personal health.*
The following budgeting tips can help relieve some of the stress surrounding late-life financial security and assist in tackling debt before it becomes toxic.
Commit to a Budget
Create a financial strategy that considers necessary costs against your monthly income as a retiree. Add any debt to the mix and plan to eliminate it without putting your essentials in jeopardy. Any discretionary income should be paid toward liabilities, specifically debts with mounting interest.
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Take Advantage of Government Programs
Investigate the advantages and disadvantages of Medicare and Social Security, since both can help supplement your budget and relieve the strain of insurance costs. Though neither system is perfect, those who investigate Medicare coverage policies by state and wait until later in life to claim Social Security benefits (specifically after age 67), can expect cheaper monthly premiums and larger checks.**
Downsize to Accommodate Your Lifestyle
If you’re still scraping by, despite securely setting a budget, downsizing may be the easiest way to ensure stability. Eliminating unnecessary expenses and reining in expensive utilities is a great start, especially if you’re willing to get rid of nonessential subscriptions and extraneous motor vehicles or residences. Depending on public transportation can also erase the costs associated with driving, particularly gas, registration, and maintenance fees.
The adjustment to a thriftier lifestyle may take some getting used to, but the long-term benefits outweigh any growing pains and a life lived without debt is certainly worth the cost.
* Anonymous, (2018). Senior Debt Facts National Council on Aging. Retrieved September, 2019
** Yochim, Dayana, (May, 2018). When to Take Social Security Benefits: 62, 67 or 70?. NerdWallet. Retrieved September, 2019