Published May 26, 2023, 7:20 p.m. by Arrik Motley
When it comes to retirement, one of the most important things you can do is pay off your education debt. This can be a difficult task, but it's important to start planning for your retirement now. Here are a few tips to help you get started:
1. Make a budget: This is the first and most important step in any financial planning. You need to know how much money you have coming in and going out each month. This will help you figure out how much you can afford to put towards your education debt each month.
2. Create a plan: Once you know how much you can afford to pay each month, you need to create a plan. This plan should include when you want to retire and how much money you'll need to have saved. It's important to be realistic with your goals so that you don't get discouraged.
3. Start saving now: It's never too early to start saving for retirement. The sooner you start, the more time your money has to grow. If you're already contributing to a 401k or other retirement account, consider increasing your contributions.
4. Consider refinancing: If you have private student loans, you may be able to refinance them at a lower interest rate. This can save you money each month and help you pay off your debt faster.
5. Make extra payments: If you have extra money each month, consider making extra payments on your education debt. Even an extra $50 each month can make a big difference over time.
Following these tips can help you pay off your education debt before you retire. It's important to start planning now so that you can enjoy a comfortable retirement later.
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in this video we'll look at what
expenses you should think about getting
rid of before retiring and a few
mistakes that retirees make when it
comes to expenses in retirement there's
a few things that you may want to say
goodbye to before you say goodbye to
that wage or that work income we're
going to cover this in three parts it's
going to look like this first we'll go
over needs and wants and then what i'd
call highway robbery and then also what
to ear mark in retirement we've seen
that the retirees that can get rid of
these expenses before retiring have a
little bit more breathing room and they
feel better about their retirement plan
because when you're planning for
retirement we usually think about really
two types of expenses it's the needs
which are the essentials the absolute
must-haves to just live you know as you
think about my maslow's hierarchy of
needs those things at the base layer and
then there's the wants which are the the
nice to have things but then there are
other types of expenses that really
don't fit into that category of needs or
wants those are the things that we need
to be done with before retirement and by
the way i'm dave zoller and me and my
team we run streamline financial it's a
wealth management firm focused on
retirement planning and we've been
helping people personally for 13 years
and streamlines been around for 22 years
and we created this channel to share
what's working with our clients so that
you can benefit too so if you're close
to retirement be sure to subscribe
because i share one new video each week
to make your retirement a little bit
better i also put some free resources in
the description below like my favorite
diy retirement planner if you're more of
a do-it-yourselfer so let's get into the
list and then as you're watching if i
leave something out please share it in
the comments below i'd love to hear from
you and then also i'll try to reply back
to depending on how many comments i get
so the first two you will probably agree
with but you might not be thinking about
the other ones and i want to show you
ways to prepare and just make sure that
your retirement is a little bit smoother
by using our retirement planning
software the first one which you already
know is to pay off high interest debt
which i sometimes think of as highway
robbery it's when those interest rates
are just
so high and they're charging people it
just seems unfair right that high
interest debt i'm referring to is
usually credit card debt and sometimes
it's student loan debt and you'd be
surprised at the number of people who in
their first year of retirement they
still have a large monthly payment
towards credit card payments or student
loan debt and this should be the number
one thing that we should focus on to
really reduce before we say goodbye to
that job income or that wage because if
you retire with credit card debt and
then you get serious about paying it off
in retirement then that means you've got
this bigger amount that you got to take
from investments which could alter your
retirement plans i helped a woman
recently who's not a client but she was
looking at her plan and she wanted some
help and she had about 20k of credit
card debt she also had over a million
dollars and her regular expenses
adding on this 20k of a lump sum expense
to her plan it really made quite an
impact and once we looked at that
together it gave her the motivation to
work a little bit extra and extra hard
to get this debt payment down to zero or
get the credit card debt down to zero
before retiring because
she'd have a greater peace of mind and
it would just increase her confidence as
she was going into retirement that peace
of mind it's key right i'm sure you're
feeling the same way i actually want to
share a little bit more about how to
achieve this
before you retire and during retirement
and i share that at the end of this
video so stay tuned the next ones are
expenses that you can either pay early
or at least you want to earmark these in
your retirement plan and i'll show you
what i mean when i say earmark that just
means setting aside funds for specific
purposes and either not including those
funds in your retirement plan or
including them but at least showing the
specifics within the plan and i'll show
you some images coming up of a
retirement plan and how to do this
number one thing to earmark is any big
travel expenses that you're looking
forward to
that first year of retirement or really
the first few years of retirement a lot
of people kick off retirement and
they'll really have a big special trip
that they've always wanted to take or a
place that they've always wanted to go
to and lots of times that vacation it's
going to cost more than the typical
vacation that you might take on a
regular year it's really that cap to uh
ending work and then really
doing a bigger than normal trip some
clients choose to take one of those
european uh river cruises that are
pretty popular and they can cost 10 to
20k or more and knowing that this is a
bigger than normal expense or a lump sum
expense coming soon into retirement
you can either pay that ahead of time
like actually many of the cruise places
make you do or you can at least earmark
it in the plan and make sure that it all
works with everything and i'll throw it
in there as an example coming up soon
here's an example of a retirement plan
that's based on
annual expenses going up each year three
percent regular inflation rate and then
over on the left side we can add some
expenses that are bigger and irregular
you know not the regular every year
expenses but things we can earmark so
that we can see the impact of on the
plan before actually spending the money
and doing it this way we can add some
peace of mind to your retirement plan
and your confidence as you're spending
money
and so you can just feel that it's a
good decision and feel good about that
vacation or whatever it might be a few
other bigger than normal one-time
expenses we've seen are related to your
adult kids if you have them whether it's
final college expenses or maybe a
wedding that you want to help out with
or future gifts maybe towards a home
purchase or something like that for
those you're not really able to pay
those before you retire because we don't
know when they're going to happen so
earmarking them is the next best step
and setting funds aside to make sure
that these potential expenses that you
might have in the future are ready and
available ready to deploy when needed
one mistake that we've seen some
retirees make getting close to
retirement is not factoring in these
one-time expenses and then getting
caught a little off guard when it's time
to pay for them especially
if we're in a market like we are now now
you might be thinking one big expense
that i did not mention and before i
share that one if you enjoyed watching
this video so far and you found it
helpful please click the like button so
this can hopefully spread to other
people who are like you and might find
it helpful as well so that one big
expense that you might be thinking of
that i didn't mention yet is paying off
your whole mortgage before you retire
and this is a big one for many people
as you've heard before behind every
financial decision there's also an
emotional one as well and many people
they feel very strongly or maybe adamant
on on being debt-free in retirement and
that's a really good feeling for for
many people for others depending on
their financial decision it actually a
mortgage could actually make sense in
retirement some people see it as a fixed
expense which doesn't go up with
inflation it actually gets cheaper as
everything else increases with inflation
and as one dollar can buy less and less
over time which is basically what what
inflation is it may be at really
attractive interest rates as well and
some people want to have a little bit
more flexibility in their retirement
accounts by keeping some funds available
in their non-retirement accounts versus
using that money to pay off the mortgage
the more important thing to to think
about when deciding whether this makes
sense whether to pay it off or not is
try to measure first just the emotional
feeling or comfort
with debt you know yourself and then
also your spouse if you're married and
then step two is map out both scenarios
what does it look like that plan that
we're just looking at over here what
does it look like if you pay off debt
early or don't pay off the mortgage at
all look at the difference see which
one's okay lots of times it comes down
to the strength of the emotional feeling
around debt
for one person in the relationship or if
it's just you
then it's just whatever you prefer when
we're thinking about paying off expenses
or earmarking things in retirement
get help from a financial professional a
cfp could be a great place to start but
i'd like to hear from you
what did i not mention as we're thinking
about these different expenses in
retirement i'd love to hear your
thoughts about these expenses and
especially the thoughts on mortgage
having a mortgage in retirement and i
want to share another video about how
increasing peace of mind and making sure
that you get both parts
needed for a successful retirement the
sad thing is that in this industry the
financial industry most of the time they
focus on one thing but here's a video to
watch that'll help you think about and
prepare for both sides of retirement so
hopefully i'll see you there and if you
haven't already subscribe and then i'll
see you in future videos take care
you
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