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

pay credit debt ASAPswitch to spouse coveragesavingsMinor Children car loanteach importance of helping othersLTCleave a legacybetter termscommunity college6 month waiting period2015 record year car sales3 step financial road map30 year mortgage don't spend bad decisionshousing marketBankUniversity of Floridafamily save at least $100 monthlysavings pleasurelearn good financial choiceskid borrow firstsetup automatic savings withdrawpay down student loan debtverify retirement plan with HR or plan sponsordo you need life insuranceEric Dodge borrow each year, capitalization is going to pile up Young Adult 50 over 50emergency fund savingssuccessno apology3 bucket approachprescription tierLoveenjoy saving Financial Cliffteach your child good money habitsdear suzefinancial goal phrasecompare provider pricingpay off debtMost Influential Celebrities ListUS Tax Codemarriage inequality401(k) Contributionsdon't extend mortgage Legal GuardianLTC shoppingcredit utilization ratedangerous money seasonSelectQuote.comsecured cardbe good examplenon conventional routeLong Term Care premiumstake actionoverspend on nights outreduce monthly paymentpowerfulprotect and provide for minor child high deductible health care plancut monthly cable billFRASave Us Moneyraise insurance deductibleno retirement funds for down paymentARM Cautioneliminate credit card debtincrease retirement contribution ratedon't use allowance as bribeRetirement Savingspeace of mindignore 6 month grace period Prime Rate IncreaseAdequate Auto and Home Insurancelet them have 50% controlderailed planAmericans don't use all paid vacation timelower rateGiftnegotiate points with bank or sellerhealthy teethbalance transfer low-cost index mutual fundAlarm Clocksame sex marriage band end Floridapaying for collegetaxescollege graduateno life insurance financially irresponsibleis it kind?live below your meansHDHP's are not badpercentage men widowed 75-84lower mortgage interestmeet monthly home ownershipkids schedule paymentsMotherlow credit scoretax refund fraudhome insuranceretirment savingscar leasingunder 18 financial giftlousy investmentface your financial fearfinancial concernhome loan credit score below 740 high FICO scoresocial securitypay interest while in schoolgift grandchild IRA contributionmax employee matchno negativityearn more on savingsunexpected expenselong-term care premiumsmax employer matched 401(k) contributionfinancial independenceStaffords this year have a fixed 6.8% interest rateInflation BenefitWillHDHP earn allowanceCNBChighest possible benefitInvest for savings growthhealthy gumsswitch to roth 401(k)max benefit coveredHDHP/HSAjuggle multiple financial goalsTeachlife insurancealways use all paid time offfile asapteens and moneyARMbig results planprotect your familyborrowing plan universal college accessconfident of solutiondebt freeresponsibleadd teenEasy Life Insurance HDHP's are good for you401K2015 financial roadmappermanent life insuranceOverspendingtax ID theftretirementhealthy retirement blood pressuresuitableCivil Rightsspeak new goal15 year mortgageCOLAkeep a schedulerefinancebest interest of investordental insurance repay student loansschool ForbesCD'slong term goalFinancial Solutions For YouNew american Dream not enough life insurancesame-sex marriagehealthy youwomen long term carePBS Specialhome related tax break bonus reduce interest rateFHA loan feesCredit scorehealthy aging Suze is my biggest mentorfinancial fearsbetter loan ratesFundspurely financial standpointConventional loan PMIBill and Pennytoo expensive schoolno private loanpay down car loanRevocable Living Trust20% down payment40% toward financial goalproperty taxBankruptcycontribution strained relationshipvalentines daydebit cardlong-term care grandparent IRA contribution Financial Systemyours, mine & oursconfidentFiscal Responsibilitydental discount planback door Roth IRAMoney8 month safety netorigination feesengaged in financesCredit Card Rate IncreaseRoth 401(k)escrowfinancial argumentsraising mortgage rates get the most out of social security best interest ratesFinancial Advicecomparison shoppingcommitraise your deductiblestore credit cardsonly refinance if it paysmonthly benefit Urbana-Champaignreal estate mistakesexercise reguarlynear historic lowsrequired disclosurecan you afford itraise deductiblesmanage student loanstelevision hostStudent DebtBaby BoomersPost-Divorceno splurge roth iralow mileage discountSuze OrmanCPI-WDeath BenefitFICO Scoreresponsible with moneylower premiumcouple financesmaintain standard of livinginterest capitalization3% debt transferred AARPVeterinary Schoolprotect loved ones Mass Mutualcredit union20% equityfraudulent return20 year level term home budget after tax coststandard rateoverspend on giftssocial security never insolventclosing feesprovider of financial supportcommissionsheartacheemergency fund pay high rate off firstlower interest ratePhyllis Shelton expert long-term caresocial workcostly insurance mistakeshorter payback periodbad retirement planningfinancing car FICO at least 720Interest4 Must Have Documents Jose RodriguezSuze Orman ScholarshipLong Term Care Insurance home buying seasonwomen live longerstaycationterm insuranceFixed Rate Mortgagesecure creditGoodbyeHigh Credit Scorebill paying prioritiesmake saving a pleasureis it necessarycalculate dependents annual income needswaive home inspection bidsummer job match income get over life insurance phobialower overall drug costdon't blow tax refundAARP Social security calculatorwives should be involved in retirementletter to suzebetter loan dealsbe kind to yourselfprofessional advisorspecial saving accountloan necessitydangerous retirement planvalue moneywomen outlive menpay more than minimumhome buying mistakesdon't defer interest paymentsavoid burn outstudentburn outSatisfyingSuze Orman spouse Kathy TravisGay Rightsmental healthraising interest ratesHolidayMarlo ThomasFederal Reservebudgetloan no longer than 36monthsknow before you oweExhibitioncredit managementincrease emergency savingsTelepictures20 to 25 times annual incomeMortgage Credit Availability Indexchildren's bookteensno waiting periodaffordabilityquick closingno interestpublic service career student loan repayment Cory BookerEmployer Matched Contributiondream schoolschedule vacationdon't derail retirement savingsfour steps to retirement savings file taxes quicklyfull retirement ageAccuQuote.commortgage disclosuredon't do five year car loanloan is giftSandy Hook PromiseGiftsSandy Hook Elementary School20% down payment avoid feesbuying car 2016buy homeFinal GoodbyeFinancial EducatorAshley Springerpercentage of women widowed 75-84high premiumsCombo Insurance Productsage appropriate choreopen enrollment review contribute household expenses Suze changed my lifecreate new truthapproved medical 100% tax-freethree year car loancostly legal new cargrandchild summer job IRA contributionmarriage financial responsibilityreplace permanent life insurance with term!00% tuition paidis it true? Commencementtraditional vs roth 401(k)Wall Streetconsider roth 401(k)student loan repayment planmonthly dental insurance premiumclosing costs 2% of loanlowest cost fund optionreferrals life insurance name trust as beneficiarypoint cost offset by savingsHigh FICO Score = Better Ratebuy down Warner Bros Television Groupdeath benefit 20 to 25 times annual incomefinancial aidallowancedoctors in networkAmy LacyetForeclosurepaid vacationInfluentialsreduce withholdingEmergency SavingsMust Have Documentsstudent loan repaymentThe Suze Orman Showinterest on student loansCollege of Veterinary Medicinerequire chore in exchange for allowancehigh down paymentretain separate credit cardscost of capitalization calculatorinsurance yearly reviewmortgage interest tax deductionInfluential Celebritybuy home you can affordFinancialstandard deduction home buying budgetRichcar buying mistakes10 year repayment plan loan big picture charges on credit cardincreased auto insurance premiumage appropriate goalsonly offered while employed retirement planinitial tax break Money MarketNewtownrolloverstretch out haircut appointmentsmobile appdeath benefit needs for familyGay CouplesRetirement Incomesave not gender specific low down paymentBeautydon't charge a penny8 month emergency fund2017 Taxeshealthy retirement weightbe true to yourselfPay Off Debt Before RetirementPersonal FinanceHow To Build Creditincentives for health care wellness screeningUniversity of Illinoisfederal student loan deferment premiumpush yourself to save more for retirementHDHP'sovercome financial fearsFederal Funds RateForbes Top 10Prime Rate Rise 2015iffy incomepresident Obamaadult childrenno tax on withdrawlscredit reportgift not loanclosing disclosurebuying a carFinancial Awareness15-year refinance dealinsurance mistakeCredit Card Interest Rateaccelerate dental workwomen longer life spanLifestylepreexisting condition not coveredSuze approvedinsuranceidentity theftdo not pay allowance for good behaviorSpendingmortgage brokerpositiveFinancial Power of Attorneyadjust allocations no sneaking in fees740 credit scoreco-sign anticipated salaryNew York LifeFederal Stafford loangay marriage ban end Florida no fee transferemotional stakesunsubsidized Stafford loan2016 adjust estimated taxCiti Simplicity Card fiduciarymortgagecollege studentaffordable premiumdoctor no longer in networkautomatic withdraw to savings Free Debt Eliminatorsave moneypublic service loan forgiveness programdental savings plandepreciating asset multiple lenderstitle insurancerefundrising home pricessmall changes physical healthoverspend on dining outChanging Livesautomate student loan paymentsfocus on new truth one credit cardgift up to 14,000children under 18holiday spendingritual scheduleHSA tax savingsCommunication Skills LTCi ASAPno late fee 19 years cash flow problemallowance taskVital Documents2016 adjust withholdingdebtsidelinedHoliday Seasonwrite new goalHoliday Shoppingincrease retirement savingscompare monthly expenses10% donate to charityworst financial mistakeworkaholicis it necessary?paid in fullFinancial Gift CliffSchool of Social WorkETF'sidentity fraudFinancial Awareness Video FestivalAuto Savings short term goal cnbc alarm clockbest loan deal loved ones dependent on incomeStudent Loanhigher monthly paymentlong term caredon't cover cosmetic dentistryGraceWashingtonRevocable Trustannual cost of living adjustmentemployer offered life insurancejanuary bills3 savings buckets social security not going brokedon't ignore open enrollmentMoney-Savingreal estate marketterm life insuranceone annual feemoney vowsFICO credit score credit card mortgageultimate compounding giftget health insuranceretirement accountsHeartwould you decline a bonushigher insurance deductibleSuze Orman's Money WarsFederal PLUS loanalternative FICO scoreverify wellness screening and programsStock Investmentsautomatic paymentemployer funding HSAbreakdown projected monthly housing costIRA contribution gifted moneystudent loan debtOne Wallet At A Timecut monthly cellular billeight month living expense Swap Older Annuities or Life Insurance Long Term Care shoppingadvice for college graduatesitemized deductionshop online guaranteed level term policyget credit cardback-to-school budgetDurable Power of Attorney for Health Carezero rate transfer dealsno private loansStudent Debt Crisiscommunity bankcredit cardrent vs buydon't buy wantsmoney-aware childSelfishstay positivebecome member at worst still pay 75% benefithigh credit score discountstudent loan repayment estimatorpay 100% cashprotect dependent spring summer 8 Rulesfocus on needsgraduation

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