By the time you reach retirement age, you’ve earned the right to relax. Unfortunately, many seniors are finding themselves with too much debt and not enough income–and don’t even get me started on Medicare.
No matter where you are in life, it’s never too early to start retirement planning. Here’s how to coast into your golden years and enjoy a stress-free retirement.
Basic Steps for Debt-Free, Stree-Free Retirement Planning:
- Pay off your credit cards
- Consolidate your debts, if needed
- Manage your mortgage
- Consider online investing
Credit Card Payoff
Your first step in retirement planning should always be credit card payoff. Carrying credit card debt is a lot like trying to sail a leaky boat–you’re constantly bailing water just to stay afloat. Once you pay off your cards, it’ll be so much easier to focus on your future. Commit to paying as much as you can every month until those balances hit zero. You might also consider using a rewards credit card. These rewards can be used to pay off future expenses!
Okay, but what if you have a lot of debt scattered across multiple places? That’s where debt consolidation can make a difference. When you consolidate your debts, the goal is to get a lower overall interest rate and manage just one monthly payment. This is especially useful if you are trying to cope with credit cards that have high interest rates.
When you purchase a home in your 30s, the idea is that you’ll be free and clear by the time you retire. But for many people, that’s simply not the case. Mortgages are one of those expenses you really can’t do much about–unless you decide to sell. Depending on where you are in life–and whether you’re thinking about downsizing anyway–you might find that it’s actually more economical to rent than own.
Consider Online Investing
Most people stick to basic savings models for their retirement money. You stick part of your paycheck in an employer-matched IRA or 401(k) and then maintain a savings account at your bank. The rates on those accounts tend to be very conservative–low risk, low reward. If you’re interested in making your money work for you, it might be worth looking into online investing.
There are a number of online stock brokers to choose from–NerdWallet does a rundown of the best ones here–and you can choose how much cash you’re willing to invest. Just make sure that you don’t gamble with more than you could afford to lose.