Contrary to popular belief, credit card debt is not exclusive for young people. Instead, it is something that can affect everyone at any given time of their lives.
Even if debt happens to be just as harmful to all, being on it during retirement does bring some disadvantages that won’t be happening for anybody else. For the most part, rather significant drawbacks, which you should be avoiding at all costs.
To give you a better understanding of this sort of circumstance, we’ll now be explaining how debt might affect your upcoming retirement.
Debt isn’t affordable this late in your professional life
Regardless of whether you’re planning to retire or work part-time, the truth is that you’ll never see the likes of your old paycheck ever again. So your retirement will most likely be dependent on your savings and social security benefits.
With that in mind, it stands to reason that most retirees don’t have enough working space to cover up for debt while still managing to cover every other significant expense of their daily lives.
In a way, your routine could turn out to be a constant struggle of choosing whether to buy your necessities or pay yet another percentage of your debt. That alone sounds like an ugly struggle, which will take a lot of patience and hard work out of you.
Unfortunately, things do not stop there. Large amounts of debt can also take a toll on your credit scores, which will end up costing you an extra amount of money in the form of interest rates the next time you have to borrow money.
Being a retiree, you should be open to the idea of having to borrow money every so often. In essence, this is already a significant financial obstacle, even if you aren’t planning to ask for one yet.
Think about it, where will you get the money for the next time your house needs repairs? Or car repairs instead? Those sorts of things never come for cheap.
These are the main reasons why you should work towards fulfilling your debt before entering retirement. Our recommendation? If you still owe money while nearing retirement, try extending your working years for a short while.
Even if that’s not of your liking, entering retirement debt-less is worth the effort.