Many people are faced with the dilemma of knowing they should be planning for retirement, but currently being in debt. Having that nest egg that you need when your working days are done definitely requires early planning, but no one wants to carry debt around any longer than necessary.
When unsecured debts are gnawing at you each and everyday, it’s really easy to put off that retirement planning, but that really the best course of action?
Why It’s Important
Retirement planning is important….so important that many financial experts say you should continue on with your plans even if you’re in debt. The reasoning is that the clock is ticking. You only have a certain number of working years to earn what you need to earn, and that number is only going to shrink.
It’s important to keep in mind that retirement is just as much about money as it is about age, maybe more so. It’s true that just about every retirement plan also has an age attached to it, but if you had enough socked away and an effective enough plan to retire at 50 wouldn’t you do it?
Not to mention, if you have debt that’s going to take more than five years to pay off and you put off your retirement planning for that long, you may not be able to recover in time.
Check That Interest
If you do have debts like credit cards, loans and credit lines, it is a good idea to check out the interest rates before blindly deciding to continue saving. If you’re loaded up with high interest cards and loans, taking a temporary break from retirement planning might be a wise option. Or at least set up a meeting with your creditors to see if you can’t shift them to lower interest options.
It’s Ultimately Up to You
There’s really no perfect answer that’s going to fit everyone’s life, which is probably why it’s called ‘personal’ finance. Take a good, honest look at your lifestyle and your situation and your personality and try to determine what’s the reality for you.
If you think that you’re just going to run the debt up again or won’t be diligent about paying it down as fast as possible, then you have no choice but to keep saving for retirement. On the other hand, if you know that you’ll make every sacrifice to get it all paid as quickly as you can, then maybe taking a short break isn’t a horrible idea.
Get a Second Opinion
Trying to work it all out on your own can get a little overwhelming, so it might help to get a second opinion. A retirement expert or financial planner or credit counselor can help you organize your thoughts and your finances. Then, you can follow the course of action that will take you into retirement debt-free and with the most money in your pocket.
