This week, we’re talking about the importance of unloading your debt before you transition into retirement.

If you still have debt when you enter retirement, it can create a potentially dangerous collision. This collision may not happen for many years down the road, or never at all, but you can see the cars piling up in front of you and we gotta put the brakes on.

Here’s the real problem with debt in retirement: Debt creates minimum monthly obligations - bills you’ve got to pay. If you have a mortgage payment, and a car loan, and some credit card debt, those are all bills that need to be paid every month. And if they’re not paid, we’re talking serious consequences, like foreclosure.

If you’re retired, your income is limited to what your social security, pension, investment portfolio, and other income sources can provide. And your ability to earn your way out of a debt problem by getting a job is now very limited. Especially as you age. How many 80 year olds do see driving an Uber?

So by reducing or eliminating your debt by the time you hit retirement, you have a lot more breathing room and a lot more freedom and flexibility to decide how to spend your income every month.

That’s it for today, Thanks for listening!

Tomorrow, come on back, because I’m going to cover how you can get started on reducing your debt before retirement. It doesn’t have to be this grand, austere undertaking. I’ll give you a simple way to get started in tomorrow’s tip.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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