Suze Orman TwitterSuze Orman FacebookSuze Orman YouTubeSuze Orman LinkedIn
View Blog & News List

What Baby Boomers Are Getting So Wrong About Retirement

October 27, 2014 at 12:00 PM

Listen up my 60 something friends (and those of you heading to that milestone soon) we need to have a talk about your retirement planning.

I know from my many conversations with you that you have worked hard to save more. Great. And I know many of you are now aware that waiting to delay when you start to take Social Security to age 70 (at least for the higher earning spouse) is a fantastic way to boost your retirement income. Great again.

But where so many of you trip up is that you are heading into retirement still in debt. A recent report from TransUnion found that nearly one in three Americans at least 60 years old has debt and the average balance is more than $60,000. That’s up sharply from 2005 when 22% of the 60+ crowd had debt and the average balance was $40,000. That $40,000 adjusted for inflation would still be less than $49,000 in today’s dollars, so the sad fact is that older Americans are indeed living with more debt as they reach retirement.

I can’t stress this enough: paying off all your debts before you retire is the ticket to a more secure retirement. Your bills will be lower, which is what you want when you are going to be living on a fixed income. Besides, there’s the emotional benefit. If your living costs are lower-because the mortgage and home equity loan are paid off, and you don’t have credit card debt nagging at your conscience-your stress level is going to be lower. And isn’t that what you deserve in retirement?

Take Control Of Your Retirement

So how do you come up with the money to get out of debt: Well, for starters, look at your current living expenses. (You can use my free Expense Tracker.) I challenge you to separate needs from wants, and then tell my you can’t find at least $250 a month in reduced spending that could go toward debt reduction. And I said at least. I bet you can find more.

If you intend to live in your current home once you retire, I really want you to put some elbow grease into getting the mortgage paid off no later than when you retire. If you are contributing more to a 401(k) than what is needed to earn the maximum matching contribution, scale back your contributions. And use the extra money in your paycheck to pay down your mortgage. I want to be clear: you are only to contemplate this if you can honestly say that you can afford to stay in that house. I know you want to stay in the house. But please be realistic. Even if you are mortgage-free there will always be insurance, and property tax and maintenance. If the cost of those expenses is going to be too much, the best retirement planning move you can make today is to start thinking about where and when you will downsize. It may be to a smaller home in your neighborhood, or perhaps an entirely different state, where you can live easily by living debt free.

Tag Cloud

Fundsmarriage inequalitypublic service career student loan repayment SelfishHDHP'szero rate transfer dealsFederal Stafford loanpaid vacationHDHP's are good for youAARP Social security calculatorclosing disclosureThe Suze Orman Showstudentadd teendon't use allowance as briberaise insurance deductiblecommunity collegetelevision hostphysical healthMass MutualStudent Loanrent vs buyface your financial fearraising interest ratesdental savings planoverspend on giftslife insurance name trust as beneficiaryMoneyrequire chore in exchange for allowanceGiftsapproved medical 100% tax-freeone annual feeMoney-Saving2015 record year car salesFixed Rate Mortgageprescription tierlower interest rateCOLAwrite new goal8 month emergency fundlower ratedebt freecomparison shopping3 savings buckets College of Veterinary Medicinecredit uniondon't extend mortgage Veterinary School3% debt transferred responsibledon't cover cosmetic dentistryBeautystrained relationshipreduce interest rate3 step financial road maploan is giftcompare provider pricinglower overall drug costno private loansCNBCmortgage interest tax deductionUrbana-Champaignunexpected expenseLong Term Care Insurance Communication Skills credit reportloan no longer than 36monthsincreased auto insurance premiumhome buying budgetStaffords this year have a fixed 6.8% interest ratehome insuranceAmy Lacyetmaintain standard of livingdangerous money season2017 Taxesstore credit cardsBankruptcydon't spend Inflation Benefitovercome financial fearsinitial tax break earn allowanceraise deductiblesloan necessitycostly legal CPI-WGay Rightsmeet monthly 20 to 25 times annual incomedon't derail retirement savingsHow To Build Creditcharges on credit cardfraudulent returnpresident Obamalive below your meansitemized deductionSwap Older Annuities or Life Insurance same sex marriage band end Floridagift not loanspeak new goalMoney Marketreferrals Free Debt Eliminatorstandard deduction allowance tasknon conventional routebuying car 2016federal student loan deferment big results Conventional loan PMIquick closingCivil Rightsback door Roth IRAcar leasingARM Cautiontoo expensive schooldear suzespecial saving accountdon't defer interest paymentsopen enrollment review children under 18letter to suzelowest cost fund optionget the most out of social security Forbeshousing marketEmergency SavingsHeartlow mileage discountescrowidentity theftjanuary billsfinancing car buy homeprotect dependent don't buy wantsLong Term Care premiumsARMpaid in fulldo not pay allowance for good behaviornegotiate points with bank or sellerHigh Credit Scorebad retirement planningalternative FICO scorecredit cardearn more on savingsSuze Orman50 over 50no retirement funds for down paymentstay positiveadult childrenignore 6 month grace period automate student loan paymentsprofessional advisorgrandchild summer job IRA contributionfinancial concernpowerfuloverspend on nights outbe true to yourselfmental healthstudent loan debtsavings pleasureloved ones dependent on incomeRoth 401(k)long-term care Minor Children Suze approvedpay interest while in schoolno splurge better termscut monthly cable billproperty taxautomatic paymenttax ID theft40% toward financial goalVital DocumentsDeath BenefitTelepicturesgift grandchild IRA contributionbill paying prioritiesWall Streetstudent loan repayment planrising home pricesmax benefit coveredburn outFiscal Responsibilityinsurancesetup automatic savings withdrawForbes Top 10Jose RodriguezWarner Bros Television GroupFICO at least 720long-term care premiumsreduce monthly paymentkid borrow firstconfidentat worst still pay 75% benefithigh down paymentUS Tax Codederailed planOverspendingreplace permanent life insurance with termFinancial Gift Cliffoverspend on dining outraising mortgage rates high premiumsno tax on withdrawls401Konly offered while employed PBS Specialsuitablesave moneywomen longer life spanbuy home you can affordno fee transfer10 year repayment plan Financial Awarenessadvice for college graduatesFICO ScorePost-Divorcehome buying mistakesinterest on student loansdon't do five year car loanForeclosureenjoy saving Financial Advicepay 100% cashLTCdon't charge a pennypositiveknow before you owelow-cost index mutual fundfinancial aidlong term goal19 years cash flow problembe good exampleLTCi ASAPemergency fund savingsfinancial argumentsyours, mine & oursSuze Orman Scholarshipsidelined2015 financial roadmappreexisting condition not coveredhealthy retirement weightAuto Savings Financial Solutions For Youdoctors in networkwives should be involved in retirementco-sign LTC shoppingmarriage financial responsibilityhigh deductible health care planresponsible with moneypay credit debt ASAPfiduciarylower mortgage interestcouple financespush yourself to save more for retirementSandy Hook Promiseautomatic withdraw to savings SpendingGraceIRA contribution gifted moneyprotect and provide for minor child home budget after tax costMother8 RulesRetirement Savingsbalance transfer costly insurance mistakeFederal PLUS loanroth iraUniversity of Floridano interestsocial securityback-to-school budgetGoodbyeNew York LifeSuze changed my lifehome loan credit score below 740 exercise reguarlylet them have 50% controlhome buying seasonverify retirement plan with HR or plan sponsorhighest possible benefitSave Us MoneyFinancialno negativityverify wellness screening and programsbetter loan dealscommissionsunder 18 financial giftreal estate marketpublic service loan forgiveness programstudent loan repayment estimatorunsubsidized Stafford loanFinancial Systemeliminate credit card debtstaycationanticipated salaryFederal Funds RateCredit Card Rate Increaseprotect loved ones be kind to yourselfno waiting periodrepay student loansAshley Springeremotional stakesshorter payback periodcommunity bankannual cost of living adjustmentETF'sSatisfyingfile taxes quicklylow down payment10% donate to charitystudent loan repaymentcost of capitalization calculatorfinancial fearssuccessBill and PennyAdequate Auto and Home Insurancekeep a schedulecontribute household expenses higher monthly paymenthealthy gumsrolloverFICO credit score credit card mortgageFinancial EducatorCory Bookerdangerous retirement plandream schoolretirment savingspay more than minimumworkaholicsame-sex marriageInterestdeath benefit needs for familyretirementhealthy retirement blood pressurecreate new truthfour steps to retirement savings bad decisionsGay Couplesvalentines dayemployer offered life insuranceis it true? credit managementlower premium4 Must Have Documents HDHP/HSACiti Simplicity Card closing feestaxesincrease retirement savingsemergency fund FRAmax employee matchnew carinsurance mistakedon't blow tax refundhealthy youOne Wallet At A Timeritual schedule!00% tuition paidis it necessarySelectQuote.comcut monthly cellular billbuying a carcontribution pay high rate off firstdental discount planspring summer AccuQuote.comworst financial mistakesecured cardorigination feespurely financial standpointgift up to 14,00020 year level term Must Have Documentsterm insuranceno life insurance financially irresponsibledon't ignore open enrollmentpay down student loan debtStudent Debt Crisismonthly benefit Washingtonfinancial goal phrasegrandparent IRA contribution teach your child good money habitssavingsBankdental insurance summer job match income switch to spouse coveragehome related tax break bonus Newtownsocial security never insolvent8 month safety netmax employer matched 401(k) contributionis it kind?incentives for health care wellness screeningswitch to roth 401(k)financial independenceavoid burn outfull retirement agecollege studentSuze Orman spouse Kathy TravisFinancial Awareness Video Festivalretirement planage appropriate chorecommitnear historic lowsmoney-aware childwomen outlive menSuze Orman's Money Warsshort term goal Personal Financetraditional vs roth 401(k)depreciating asset cnbc alarm clockfocus on needsheartachestretch out haircut appointmentspeace of mindFinancial Power of AttorneyCombo Insurance Productsdebit card740 credit scoreclosing costs 2% of loanMarlo ThomasPrime Rate Increase2016 adjust estimated taxYoung Adult Pay Off Debt Before Retirementraise your deductibleNew american Dream multiple lendersEasy Life Insurance best loan deal Retirement Incometeens and moneycompare monthly expensesbest interest of investorRichtax refund fraudlife insurancemortgagepremiumbetter loan ratesteenssocial workone credit cardno sneaking in feeshome ownership2016 adjust withholdingreal estate mistakesmobile app20% down paymentHolidayborrow each year, capitalization is going to pile up would you decline a bonusMost Influential Celebrities ListCredit Card Interest RateTeachkids schedule paymentslong term careLovewomen long term careHigh FICO Score = Better Rateemployer funding HSAAARPInvest for savings growthCD'sidentity fraudis it necessary?healthy teethpay off debtDurable Power of Attorney for Health Care15-year refinance dealHSA tax savingssave manage student loansGiftHoliday Season20% equityrefundcredit utilization ratebudget15 year mortgageAlarm ClockStudent Debtget health insurancebreakdown projected monthly housing costcar buying mistakesInfluentialssocial security not going brokefamily save at least $100 monthlysecure creditPhyllis Shelton expert long-term caremortgage disclosurewaive home inspection bidmoney vowsno apologyExhibitionhigher insurance deductiblebecome member buy down percentage of women widowed 75-84required disclosuregraduationconsider roth 401(k)holiday spendingultimate compounding giftHoliday Shoppingborrowing plan not gender specific low credit scoreinterest capitalizationno private loanLegal GuardianLifestyledebtFinal Goodbyeage appropriate goalsstandard rateloan big picture leave a legacyRevocable Trustthree year car loanpercentage men widowed 75-84pay down car loanschedule vacationStock Investmentswomen live longereight month living expense Americans don't use all paid vacation timeretirement accountsaffordable premiuminsurance yearly reviewcollege graduatePrime Rate Rise 2015juggle multiple financial goalsSchool of Social Workconfident of solutionEmployer Matched ContributionHDHP small changes term life insurancerefinanceFinancial CliffEric Dodge adjust allocations Federal Reserveget over life insurance phobiaallowanceCommencementCredit scorehigh credit score discountChanging Lives30 year mortgage focus on new truth high FICO scorecalculate dependents annual income needsgay marriage ban end Florida children's bookfile asapaccelerate dental work20% down payment avoid feespoint cost offset by savingsmortgage brokerHDHP's are not badhealthy aging protect your familyvalue moneyincrease emergency savingsSuze is my biggest mentor6 month waiting periodcar loanBaby BoomersMortgage Credit Availability Indexaffordabilityno late fee University of Illinoislearn good financial choicescan you afford itpermanent life insurancemake saving a pleasuredo you need life insurancetake actionengaged in financesiffy incomepaying for collegeRevocable Living Trusttitle insuranceshop online guaranteed level term policyget credit cardFHA loan feesreduce withholding401(k) Contributionsdoctor no longer in networkplanincrease retirement contribution rate3 bucket approachretain separate credit cardsnot enough life insuranceWillprovider of financial supportalways use all paid time offteach importance of helping othersonly refinance if it paysmonthly dental insurance premiumSandy Hook Elementary SchoolLong Term Care shoppingdeath benefit 20 to 25 times annual incomelousy investmentuniversal college accessbest interest ratesInfluential Celebrityschool


View Blog & News List
People First. Then Money. Then Things.
Connect with me on Facebook Connect with me on YouTube Connect with me on Twitter
© 2017 Suze Orman Media Inc. All rights reserved.
 
 |  Search  |  Sitemap  |  Privacy  |  Terms
Sign Up For E-mail Offers
Open Panel
Close Panel