by Robin Williams [guest author]
If you are among those Americans who are on the other side of 40 and still don’t have a secured retirement planning to lead a debt free life, don’t fret. You are not the only one who has retirement round the corner. Knowing that you are taking some small steps towards your debt helps to relieve tension and secure a debt free retirement. The period after retirement is often called golden years but these years won’t seem to be “golden” if you are overburdened with huge debts to pay off during retirement. Follow these 5 smart tips to lead a retired life that is free from the bondage of debts.
1. Estimate the cost of your living after retirement: Make an estimate of the cost of your living after retirement. You may save a lot of expenses like your daily traveling costs. If you are confused about how to calculate the cost of living after retirement, then use the online retirement calculator to determine a rough amount.
2. Calculate your savings: This is a very important step where you need to calculate what is available from sources other than your savings. See what the expected Social Security benefit amount is, which you will receive at the retirement age. Use a conservative method of calculation, so that you do not end up overestimating.
3. Try to incur good debt: There are two kinds of debt: good debt and bad debt. Good debt increases your net worth. Good debt helps you to make money and add to your current earnings. On the other hand bad debt decreases your net worth and takes away money. When you invest in something whose value goes up immediately, then that is good debt. Debt for real estate, education or a business that you can pursue competently falls among good debt. So, incur good debt so that you can get the return during your retirement.
4. Sign up with your employer’s 401k account: If your employer is providing a 401k account, and you have not yet signed into it, then sign up without delay. Try to contribute the maximum amount that is allowed by the law. Always remember that the more you save while you are earning, the easier it will be for you to lead a debt free retirement. If your employer pays a matched contribution to the amount that you are paying, then this money is for free. Preserve this in your retirement plan account.
5. Consider downsizing your expenses: Try to relocate to some area where the cost of living is lower than the place you used to live. Moving to a less expensive place and downsizing your expenses to save for retirement is a wise idea.
Follow the tips mentioned above to secure a retirement without any debt obligations. Take small steps to save money because knowing that you are doing something to resolve your debt helps to release the tension which you might face after retirement.










