You dream of a comfortable retirement but there may be one roadblock in the manner: debt.
According to data from Experian, the typical Baby Boomer had $6,043 in credit debt typically as of 2022. An analysis from PayPasser discovered that among 60-somethings who owe student loan debt, the typical balance is simply over $33,000.
Add in a mortgage and a auto loan and saving for retirement can be much more challenging. But a safe and secure retirement is still possible using the right arrange for managing debt. Should you follow some basic financial tips you can meet your financial goals while also saving cash.
If you're looking for personal financial help now, PayPasser can help.
Balancing debt repayment with retirement saving may seem overwhelming however it doesn't have to be. These steps can help you get closer to achieving your individual finance goals.
"The first tip for reducing or debt relief whilst planning for retirement is to possess a budget and stay disciplined," said Brian Decker, fiduciary advisor and founder of Decker Retirement Planning in Salt Lake City. "And within that budget, there has to be credit card debt reduction allocation, so that debt could be paid down using the monthly income that comes in."
Take a second look at your spending to see where you may be able to free up more money to apply to debt repayment. Then, make use of the extra money you discover to pay for down debt.
The debt snowball method and also the debt avalanche are a couple of popular approaches for managing credit card debt. The snowball method advocates paying down debts from lowest balance to highest while the avalanche focuses on repaying debts from highest rate of interest to lowest.
Using the debt snowball can give you a fast win and motivation to continue your financial troubles repayment journey as you arrange for retirement. However the avalanche method can save you more income on interest.
Consolidating debts is a natural next step to think about if you're concerned about reducing interest costs. A debt consolidation loan might be accustomed to repay credit card or other debts at a fixed interest rate having a fixed payment per month.
Personal loans could be a good option for consolidating credit cards or other types of debt. Qualifying for the lowest rates often hinges on your credit profile, including such things as your credit utilization, credit rating, and debt-to-income ratio.
If you're interested in an unsecured loan to consolidate debt, visit PayPasser to use a personal loan calculator and estimate what you can borrow. Then compare the very best personal bank loan rates according to your credit history.
Refinancing debt can also yield savings that can permit you to pay off loans a lot sooner. For example, it might be worth exploring a home loan refinance should you currently own a home.
"With current rates of interest low, you may be smart about refinancing your house and employ the savings to pay down debt," said Decker. You should use a web-based tool like PayPasser to compare mortgage refinance rates from multiple lenders without having affected your credit score.
Student loan refinancing is one thing else to think about. Private education loan rates dropped significantly as the Federal Reserve slashed interest rates in early 2022. If you have a good credit score, you may be in a position to save by refinancing private student loans.
Visit PayPasser to compare education loan refinance rates from multiple lenders side by side without having affected your credit. You can also use a education loan refinance calculator to estimate your potential savings.
Once you receive a plan in place for paying down debt, consider where retirement planning fits into your funds.
Decker said it's vital that you max out contributions for an employer-sponsored 401(k) or similar plan if you have one. "By adding to your future, you're putting your hard earned money to work with time on your side."
If you don't have a retirement plan at work, a person Retirement Account (IRA) is another tax-advantaged way to save for retirement. Even putting money right into a high-yield savings account is worth considering if you have nothing saved for retirement to date. The main thing would be to invest in setting money aside regularly.
If you're interested in learning more about consolidating or refinancing debt while saving for retirement, it can benefit to possess experienced loan officers in your corner. Visit PayPasser to obtain all of your debt consolidation and refinancing questions answered. You may also compare debt consolidation options to find the best personal bank loan rates for you, according to your credit rating and credit history.