Q: My husband and I are hoping to retire in about 10 years. After meeting with our financial advisor, it looks like our retirement plan needs some help as we still owe a fair bit on our mortgage and line of credit. What can you suggest as we would like to know how to get us out of debt sooner?
A: If you are serious about getting out of debt sooner, you and your husband will need to make some decisions going forward. Many people now face the real possibility of working longer than they’d planned as a result of years of decreased savings and increased use of cheap credit. By taking a careful look at your circumstances and resolving to make changes now, you will be in a better position to get your retirement plan back on track.
Ideas to Get Out of Debt Sooner
Here are some ideas to get you started:
- Beat the rush and downsize your home sooner than later. View downsizing your home as an opportunity to pay off your mortgage before you retire and re-evaluate what’s important to you and your family as you get older.
- Disconnect your line of credit from your ATM card; it’s a lot easier to avoid using credit if you don’t have easy access to it.
- Determine the monthly payment required to pay off your line of credit in 5 years or less and make the necessary changes in your budget to achieve this.
- If you are financially helping your adult children, it is time to help them understand the changes you will need to make so that you can enjoy your golden years. Young adults have grown up in a time where credit is cheap and easy to get, interest rates are low and savings is something you do later. While they might understand that their parents are looking forward to retirement, they may not fully grasp the financial implications. Give your kids a head start by helping them learn from what you wish you had done.
As you look at your future, also consider if there is anything you could do in retirement to help generate a few more years of income. If you’ve always wanted to go back to school, now might be the time to enhance your qualifications so that you have the ability to work on a contract or part-time basis.
With a little extra planning now, rather than at the end, you can look forward to retirement as the start of something new.
To learn more about getting out of debt, here is a simple overview of how to get out of debt along with a dozen different ideas to help you find ways to get out of debt quickly.