May 29, 2023

Pay This Off Before You Retire - Retirement Planning Tips



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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