Key Takeaways
- You may start to feel you’re ready for retirement when you’ve “had enough.”
- But what do you do if you don’t “have enough” for retirement?
- Here are five actions you can take to help you reach your money goals so that you can retire.
For some people, knowing when to retire comes with the feeling that they’ve “had enough” – and that can be anything related to the work world, whether it’s the commute, going into an office, or the overall responsibilities that come with working for a living. They’ve had enough of it and they’re ready to move on to the next chapter.
Now, in order to do so, they have to actually “have enough” – and having enough in savings to retire may not coincide with the timing of that “had enough” feeling. There may be debt that needs to be paid off before retirement can happen.
What can be done in this situation? Well, let’s look at five actionable steps you can take to reduce debt and get you closer to that goal of retirement.
First, you could sell your current home and use the difference to buy a smaller home, or a home in a less expensive city. By doing this, you may not only eliminate the need for a mortgage, but also find your day-to-day expenses lessen by not having to pay the upkeep for a larger home or for higher costs of living.
Second, if moving isn’t an option for you, try coming up with a payment plan to pay off your mortgage faster than you’re currently paying it off. The more you can put towards your mortgage, the quicker you can reach your goal of retirement.
Third, take a look at your Roth IRA or Roth 401(k), if you have one. These particular kinds of deferred qualified retirement assets allow you to pull the funds out tax-free. You might want to use this to pay off credit cards, a car loan, or a mortgage to reduce your debt and get your cash flow into a position where you’ve got income coming in rather than expenses going out.
Fourth, if you’ve got a car loan, consider getting rid of the car. If you have some money left over from doing so, you might use it to purchase a used car until you can get your cash flow working. This isn’t ideal, but if you’ve really had enough and want to retire, it’s certainly a way to further reduce debt.
Finally, there are credit cards. Cut them up, leaving just one available for use, and keep charges to a minimum. Now, if you can’t bear the thought of cutting your credit cards up, then try this trick: put them in a food container, fill it with water, and then stick that in the freezer. This way, if you find yourself wanting to use them, you’ll have to go through the hassle of unfreezing them first, which may make you think twice about whether you really need to make that purchase.
So if you’ve had enough and you don’t yet have enough, these ways of doing some debt triage can help you get to retirement. Until next time, enjoy.
Gary
If you’d like to read more on this topic, here are a few of Gary’s previous posts that you might enjoy:
