Managing debt is a crucial step in planning for a comfortable retirement. It’s obvious that having less debt will leave you with more money to spend as you please, but it’s just as obvious that no one would have much debt if it could be solved in one fell swoop.

But with some consideration and planning, there are straightforward steps¹ that can be taken to help decrease debt and save more of your nest egg for yourself in retirement.

1. Take stock of current debt: Totaling and itemizing current debts provides a good starting point when considering your next action. Mortgages, credit cards, student loans, medical bills, and more must be taken into account to provide the best picture of where your savings stand against your obligations.

• Prioritize High-Interest Debt: All debt isn’t created equal. Paying all bills on time is vital, but if you are able to go above and beyond, some strategy can help as well. Most people won’t be in a position to kick in extra on a mortgage or car payment, but paying more towards higher interest items like credit cards or personal loans will reduce the amount you pay in interest that brings back nothing in return.

• Take Advantage of Offers: If you are still employed, be sure to study any possible matches offered for contributions to your 401(k) or other retirement accounts.

• Keep an Eye on Taxes: Different investments and savings vehicles come with different tax liabilities. Proper payment and planning while accumulating what will become your nest egg can help set you up for more favorable tax situations once you begin to take distributions from these accounts in retirement.

Speaking with a financial professional is a great way to wrap your head around your debt and the best strategy to attack it. Give us a call at 678-539-9518 and learn how you can take action today that can help you live a better life down the road.  

1. https://www.pacificdebt.com/a-comprehensive-guide-to-paying-off-debt-before-retirement

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