How to Handle Debt Repayment in Retirement
Posted by Ocean Wealth
Retirement often comes swiftly and without much warning. One day you’re working 40 hours a week, then suddenly, you’re at home with plenty of time on your hands. It happens so fast, in fact, that you sometimes don’t even have time to get around to all your outstanding debts.
Now that you’re in retirement minus a full-time income, you go into panic mode. You’re thinking about how to get out of debt without having to jump back into the workforce. It can be a scary thought. But don’t get discouraged, there are still ways you can deal with debt repayment in retirement. We’re here to share a few tips so you can keep your head above water and still enjoy retirement.
Don’t Go Into Panic Mode
Panicking is one of the worst things you can do if you still have outstanding debts to repay in retirement. It’s like being in quicksand. The more you panic, the worse it gets. Throwing random ideas on the table will not help either. In fact, any ideas that you come up with after your initial debt repayment shock are probably not going to be good.
You need a little time to clear your mind and assess the situation properly. After you have all the details, then you can start formulating a plan of how to go about it. Maybe that means talking to family, friends, or even a financial advisor. Surround yourself with people who will aid you in how to get out of debt.
Organize Your Debts
This is a critical piece of the debt repayment process. You need to organize all your debts accordingly and prioritize them. Start by listing all of your remaining debts and go through them one by one to determine which ones need to be addressed first.
The most effective way to organize your debts is usually by which ones have the highest interest rates. Whether that’s a mortgage or even a hefty credit card debt, you need to know this information. If you end up paying off big chunks of debt with very low interest, another debt with much higher interest can creep up on you and sink you even more into debt.
If you’re finding it tough to keep track of all your debts, there are options for that, too. You can create a debt action plan with a single creditor that can pool all your debts in one place.
Talk to a Financial Advisor
One of the best things to do if you’re faced with a debt repayment scenario in retirement is to talk to a financial advisor. They’re not there to judge you on the strength of your past financial planning efforts, they’re there to help when you need it. They’ve also seen these kinds of situations many times before, so they know the best way to get you out of debt.
A financial advisor can adequately guide you through your debts, determining which you need to address first. They can even create a plan that will still allow you to enjoy retirement while paying them off. Suddenly, all that hopelessness about your financial situation will disappear. Get in touch with one of our seasoned financial advisors if you need assistance with debt repayment in retirement. We’re always happy to help.