Chris O'Shea
Retirement often brings lifestyle changes — no more heading into the office means seeing coworkers less often, you will likely have to adjust your spending, you might start traveling, and so on. While some of your pre-retirement routines will certainly continue in your golden years, one thing that you don’t want sticking around is debt. Here are some ways to make sure that you retire as close to debt-free as possible.
Build Your Emergency Savings
As CNNMoney reports, the sad truth is that 69 percent of Americans have less than $1,000 in available cash. Don’t let that be you — especially if you’re closing in on retirement. Build your cash cushion as much as you can so that should an unexpected emergency strike, you won’t have to rely on credit cards to pay for it.
Live Slightly Below Your Means
It may be tempting to buy a new car or something fancy to celebrate retirement, but don’t do it. Instead, live slightly below your means as you near your retirement date. That way you’re able to save as much as possible going into this lower earning phase of life. An easy way to make this happen is to create a budget that only accounts for a portion of your income. Then set up an auto savings account that sucks up the extra money without giving you the chance to spend it.
Get an Affordable Mortgage
Housing costs are usually one of life’s biggest expenses, so do your best to get a mortgage that you can easily afford. You know the general rule: Housing costs shouldn’t exceed 35 percent of your income (all in, including maintenance, taxes, insurance etc.) Try to do better than that and nudge that percentage even lower. . When retirement rolls around, you’ll be happy you did.
