The Best Debt Advice for Couples Discussing RetirementApr 21, 2017
It’s never too soon to start planning for your retirement. It can feel far away, but with living expenses like utility costs and groceries increasing financial pressure on couples, you might not have as much money to make monthly retirement contributions as you’d like. So, time is of the essence. And one piece of advice that holds true: do everything you can to enter retirement without debt.
Start the process of planning for your retirement
You and your partner should determine what your ideal retirement looks like and learn how much that will cost. Then review your current finances, including your savings and debt. This will help you to identify the work you still need to do and whether or not you need to consider getting professional debt advice or seeking debt solutions.
Talk about your ideal retirement with your partner
Sometimes people assume their partner is picturing the same financial goals as they are, and it doesn’t occur to them that their goals could actually be quite different. While you might be picturing a cozy retirement in a smaller, hassle-free home down the block, your partner might imagine traveling more and buying a condo overseas. The costs and the planning required for each lifestyle could be very different.
Take stock of your savings and debt
You can’t enter retirement debt-free if you don’t know what your financial situation is. It can be stressful to review your finances if it isn’t something you and your partner do regularly—there could be problems that you’ve been avoiding, or decisions you can’t seem to agree on.
Start by determining how much savings you have, and what types of savings—pension plans, RRSPs, investments, TFSAs, and the like. It can be a good confidence booster to realize you have numerous pockets of savings that are working to help you accomplish your retirement goal.
Learn about those various plans or accounts—some take more time to access than others, and there can be a substantial fee, penalty, or taxes owed on money taken out. So the money you have in your savings right now might not accurately reflect the amount you’ll have at the end of the day, which can result in unexpected costs or debt down the road.
Next, review all your debts, both secured and unsecured, mutual and individual. There may be areas in which you could be managing your debt more efficiently, like paying off your mortgage sooner. Adjusting your current budget can also help. Look into a debt consolidation loan if you have a number of high interest debts like credit cards and lines of credit to reduce the interest rate and combine them into one monthly payment.
Considering bankruptcy? Try this alternative instead
If you find your debt is unmanageable, and will keep you from being able to cover your costs in retirement, you should meet with a debt help professional to get advice. A Licensed Insolvency Trustee (LIT) can explain every debt relief option available to you, including a consumer proposal, to help find an alternative to bankruptcy. .
There are other debt solutions that could help you, even if your debt is overwhelming. Even though many people fear that they will have to file for bankruptcy, there are many alternatives to consider first. A consumer proposal is often considered a leading alternative to bankruptcy, as it freezes interest charges and stops legal action while allowing you to repay a portion of your debt. Your LIT would be able to advise whether a consumer proposal or bankruptcy is the best option for you.
Retirement planning can be an intense process, with a lot of things to consider. Once you’ve discussed your retirement goals, and reviewed your savings and debt, you’ll need to get into more specifics. It’s helpful to do annual check-ups to make sure your plan is on track for the happy and financially healthy retirement you want.
For professional debt advice, speaking with a Licensed Insolvency Trustee in Lindsay is your best bet, as an LIT can provide debt relief solutions that will allow you to enjoy a debt-free retirement.
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