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

identity theftstretch out haircut appointmentsEric Dodge summer job match income raise your deductibleSatisfyingbetter termsFederal Funds RateInfluential Celebritymonthly dental insurance premiumresponsiblehome buying budgetCNBCGay Rightsreduce monthly payment8 month safety netbuy home you can affordprotect dependent student loan repaymentHSA tax savingspublic service career student loan repayment no apologydon't cover cosmetic dentistry401Kkid borrow firstmobile appcan you afford itis it true? Stock Investmentsoverspend on giftsFRAFinancial Advicehigh down paymentcompare provider pricingCredit Card Interest Rateidentity frauddepreciating asset Changing Liveshome insuranceaccelerate dental workstudent loan debtincrease retirement savingsSwap Older Annuities or Life Insurance manage student loansdebit cardretirementhigher monthly payment10 year repayment plan only offered while employed know before you owe401(k) Contributionsmax employee matchHow To Build CreditHeartbudget10% donate to charitysuitablecharges on credit cardquick closingswitch to spouse coveragedon't defer interest paymentsno splurge Gracefamily save at least $100 monthlyhealthy gumsVital Documentshighest possible benefitlive below your meansthree year car loanderailed planjanuary billsenjoy saving full retirement ageDeath BenefitLegal Guardiancontribution Long Term Care shoppingPhyllis Shelton expert long-term careThe Suze Orman Showrefundmax employer matched 401(k) contributiongift up to 14,000replace permanent life insurance with termdangerous money seasonfiduciaryfinancial aidrent vs buyshort term goal dangerous retirement plancut monthly cellular bill50 over 50bad retirement planningteach your child good money habitsprotect your familyrefinancepaying for collegeco-sign don't charge a pennycredit utilization ratebad decisionsmultiple lendersbecome member raise insurance deductibleInterestescrowCredit Card Rate Increaseearn allowancetaxeshigh deductible health care plan2017 Taxesdear suzedon't do five year car loanzero rate transfer dealsCOLAAlarm ClockSelectQuote.comhome ownershipFederal PLUS loanfour steps to retirement savings tax refund fraudcredit managementUniversity of Illinoisdeath benefit 20 to 25 times annual incomeNewtownterm insurancePost-Divorcehome related tax break bonus allowance taskRetirement Incomecollege graduateCD'sForbesCommunication Skills cnbc alarm clockcollege studentincrease retirement contribution ratetraditional vs roth 401(k)one credit cardGay Couplesloan no longer than 36monthsdeath benefit needs for familyproperty taxARM CautionFederal Stafford loanLifestyleFundsemotional stakesreduce interest ratehealthy you2016 adjust withholdingborrow each year, capitalization is going to pile up teens and moneylow-cost index mutual fundtax ID theftno waiting periodcommitpay down car loanavoid burn outsocial security never insolventstudentaffordable premiumOverspendingStudent Loancalculate dependents annual income needsmax benefit coveredletter to suzecouple financesCombo Insurance Productssidelinedincrease emergency savingsfocus on new truth dream schoolUniversity of Floridahealthy retirement blood pressurestay positivesetup automatic savings withdrawprotect loved ones file taxes quicklyFinancial SystemJose RodriguezLTC shoppingpositiveincentives for health care wellness screeningfile asap3 step financial road mapAmericans don't use all paid vacation timehealthy retirement weightETF'ssame sex marriage band end Floridapercentage men widowed 75-84age appropriate choreForbes Top 10engaged in financessave CPI-Wmonthly benefit schedule vacationunder 18 financial giftconfidentStudent DebtMarlo Thomaspublic service loan forgiveness programpay off debtwives should be involved in retirementpoint cost offset by savingsprofessional advisorearn more on savingslong term careMass Mutualaffordabilitylife insurance name trust as beneficiary20% down paymentdoctor no longer in networkpay 100% cashnon conventional routebuy down no life insurance financially irresponsible19 years cash flow problemgrandparent IRA contribution origination feesTeachshorter payback periodvalue moneybe good exampleFixed Rate Mortgagemortgage interest tax deductionchildren under 18approved medical 100% tax-freeUrbana-Champaignspecial saving accountrequired disclosuredon't derail retirement savingsNew York Life20 year level term pay more than minimumExhibitionpermanent life insuranceemergency fund Student Debt CrisisAccuQuote.com20 to 25 times annual incomeeight month living expense Save Us Moneypay credit debt ASAPclosing disclosure2015 financial roadmaphigher insurance deductiblefinancial goal phraseleave a legacygay marriage ban end Florida face your financial fearno sneaking in fees40% toward financial goalFinancial Gift Cliffbest interest of investoralternative FICO scorereferrals real estate markethigh FICO scorepay down student loan debtcommissionsBaby Boomerssmall changes eliminate credit card debtcreate new truthcredit reportnegotiate points with bank or sellerburn outCory Bookerreal estate mistakesmake saving a pleasureheartachecredit uniondo you need life insurancepremiumwomen live longerPrime Rate IncreaseCollege of Veterinary Medicineno late fee Holiday ShoppingEmployer Matched Contributionstudent loan repayment plananticipated salaryAARPLTCHDHP/HSAUS Tax Codebreakdown projected monthly housing costSchool of Social Workat worst still pay 75% benefitSandy Hook Elementary Schoolultimate compounding giftroth iraCivil Rights2016 adjust estimated taxholiday spendinglower mortgage interestis it necessary?standard deduction Must Have DocumentsAuto Savings savings pleasurelousy investment2015 record year car salesdo not pay allowance for good behaviorAdequate Auto and Home Insurancemoney-aware childBill and Pennybill paying prioritiespay high rate off firstFinancial Power of AttorneyGiftFinancial CliffCommencementunexpected expensestore credit cardsdon't blow tax refundWashingtonverify retirement plan with HR or plan sponsoroverspend on dining outlow mileage discountloan is giftsecure creditswitch to roth 401(k)Revocable Living Trustmaintain standard of livingbetter loan dealsFinal Goodbyenot gender specific Retirement Savingsbig results physical healthpeace of mindRichlower rategift grandchild IRA contributionWarner Bros Television GroupEasy Life Insurance no private loansHDHP'sFICO Scorekeep a schedulebest loan deal Money MarketMinor Children one annual feeloan necessityMoneySuze is my biggest mentorinsurancemental healthAshley Springerhealthy teethnear historic lowscar leasingsocial workconfident of solutionretirment savingsMotherForeclosureallowanceNew american Dream buying a carsocial security not going brokeresponsible with moneySuze Ormanterm life insuranceclosing costs 2% of loanWillinitial tax break open enrollment review ARMWall Streetiffy incomelong-term care premiumslower interest ratepush yourself to save more for retirementHDHP's are good for youprescription tierfinancial independenceFinancial Solutions For Youstudent loan repayment estimatorsave money8 month emergency fundspring summer Suze Orman Scholarshippaid in fullemergency fund savingsemployer funding HSAsocial security!00% tuition paidTelepicturesdental savings planmortgage disclosurewrite new goalCiti Simplicity Card meet monthly universal college accessSuze changed my liferitual scheduleoverspend on nights outGiftsPay Off Debt Before Retirementcut monthly cable billraising mortgage rates Invest for savings growthinsurance mistakenot enough life insurancemortgage brokertitle insuranceinsurance yearly reviewretirement accountsexercise reguarlylearn good financial choicesget credit cardno retirement funds for down paymentdon't buy wantspreexisting condition not covered3 bucket approachAARP Social security calculatorpurely financial standpoint20% down payment avoid feesno interestback-to-school budgetyours, mine & oursfinancial concerngrandchild summer job IRA contributionmoney vowsautomatic withdraw to savings High FICO Score = Better Ratebuy homeRoth 401(k)take actionEmergency Savingsjuggle multiple financial goals15 year mortgagechildren's bookpercentage of women widowed 75-84speak new goalsavingsSpendingfocus on needsalways use all paid time offteensretain separate credit cardsannual cost of living adjustmentis it kind?High Credit ScoreStaffords this year have a fixed 6.8% interest rateclosing feescostly legal workaholicHDHP buying car 2016paid vacationFinancial EducatorPBS Specialstrained relationshipFICO credit score credit card mortgage6 month waiting period20% equitygraduationlowest cost fund optionDurable Power of Attorney for Health CareLong Term Care premiumspresident Obamacost of capitalization calculatorautomatic paymentrepay student loansMoney-Savinglet them have 50% controlFinancial Awareness Video Festivalloved ones dependent on income3% debt transferred 4 Must Have Documents don't ignore open enrollmentcommunity collegeadjust allocations add teentelevision hostemployer offered life insurancedoctors in networkrising home pricesloan big picture costly insurance mistake15-year refinance dealmarriage inequalityVeterinary Schoolcompare monthly expenseswomen longer life spanfinancing car better loan rateswomen long term careadvice for college graduatesYoung Adult kids schedule paymentssecured cardmarriage financial responsibilitySandy Hook Promiseraising interest ratesget over life insurance phobiaget the most out of social security credit cardreduce withholdingnew carcar buying mistakesfraudulent returnback door Roth IRAis it necessaryshop online guaranteed level term policyhome buying seasonlong term goalLoveAmy Lacyet30 year mortgage Long Term Care Insurance 8 Ruleshigh premiumsInflation BenefitLTCi ASAPhome loan credit score below 740 home budget after tax costsame-sex marriagebe true to yourselflow credit scorePersonal Financecomparison shoppingconsider roth 401(k)Prime Rate Rise 2015Fiscal ResponsibilityFinancial Awarenesspowerfulrolloverworst financial mistakecontribute household expenses raise deductiblesplanovercome financial fearsno private loanborrowing plan Suze Orman spouse Kathy Travisvalentines daylower overall drug costdebtbalance transfer too expensive schoolBeautyInfluentialsno negativitySuze approvedFICO at least 7203 savings buckets financial argumentswomen outlive menHoliday Seasonfinancial fearsFederal Reserveschool best interest ratesteach importance of helping otherscommunity bankhome buying mistakesretirement planMost Influential Celebrities Liststandard rateFHA loan feesunsubsidized Stafford loanFree Debt Eliminatorprotect and provide for minor child would you decline a bonusMortgage Credit Availability Indexdon't extend mortgage interest on student loanscar loanGoodbyeno fee transferBankruptcyConventional loan PMIBankincreased auto insurance premiumlower premium740 credit scoreadult childrenget health insuranceIRA contribution gifted moneydebt freeSuze Orman's Money Warspay interest while in schoolCredit scoreRevocable Truststaycationwaive home inspection bidrequire chore in exchange for allowancesuccessverify wellness screening and programsHDHP's are not badhealthy aging high credit score discounthousing marketitemized deductionOne Wallet At A Timeignore 6 month grace period mortgagebe kind to yourselfprovider of financial supportlong-term care Selfishdental discount plangift not loandon't use allowance as bribelife insuranceonly refinance if it paysfederal student loan deferment no tax on withdrawlsinterest capitalizationHolidayFinancialdental insurance low down paymentdon't spend age appropriate goalsautomate student loan payments


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