Should I be debt-free before I retire?

Senior couple

Increasingly, people are faltering at the fag end of their working years due to baggage full of financial obligations. In order to lead a happy retired life, these people will have to find out the ways to manage their money and debts efficiently.

What is the current financial condition of the baby boomers?

Baby boomers are forced to juggle with multiple lines of credit like credit cards and mortgage loans. Moreover, they are made to cope up with the financial needs of their children and pay for their college fees too.

In addition to that, these baby boomers are also taking care of their elderly parents. This is why Fidelity Investments has reported that almost half of all the baby boomers expect to retire with some financial obligations or the other.

In another instance, retirees taking advantage of members that are affiliated with the Association of Independent Consumer Credit Counseling Agencies (AICCCA) to manage their money as well as credit has risen by 27%.

Additionally, people aged 55 and above who have filed for bankruptcy from the period 2008-2011 have gone up from 22.9% to 28.6%, as reported by the Institute for Financial Literacy, a non-profit consumer association.

How should baby boomers manage their credit card debt?

In case of any sort of emergency like investment loss, medical bill or family liabilities, most of the retirees bank upon their credit cards to mitigate them. This makes them more prone to credit card debt than any other age group.

So, if you’ve been reeling under this kind of debt, then you may observe the following financial tips to get rid of that at the earliest:

  • Try to pay off the debts with the highest rate of interest first. However, if you think that it’ll take you quite a considerable amount of time to repay them, then there are several debt solutions like credit card balance transfer or consolidation loans that can help you speed up your debt repayment process.
    In this case, you must read the terms and condition of the balance transfer card since you may bump up your credit limit all of a sudden once the promotional period is over.
  • Be vigilante of any type of additional or hidden charges that your creditor may levy on your credit card bills. Moreover, don’t give into the lure of incentives or add on features on credit cards offered by the telemarketers.
    Recently, federal regulators have initiated inquiries into allegations of fraudulent credit card marketing practices brought against some of the leading banks of the country.
  • Always stay updated about all that is being reported on your credit statements. Due to this fact, you should review your bank or credit card statements on a regular basis.
    Nevertheless, if you want to get any credit card or bank services, then instead of signing up for them over the phone, ask the concerned people to give you everything in writing.

In addition to that, never feel shy of asking for help and that too when you are struggling with debt issues. There are reports that baby boomers like you who had concealed their debt woes had ended up in far more debt. So, it is better to discuss about some debt repayment options with your loved ones rather than to borrow money for your daily needs.

Article written by. Audric Stevens. Audric is a Contemporary and Financial writer and has been in the blogging industry for many years.