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Enhance your retirement with debt consolidation strategies

It’s no secret that debt can come in many forms, from medical bills to outstanding credit card payments. To simplify your life in retirement, you may want to consolidate your debt, which works by merging all the money you owe into one loan. This could ultimately help you streamline your finances, reduce the number of payments and allow you to access more favorable interest rates. We have put together three considerations for your long-term financial plan.

Carefully consider your position before breaking down any debt. Debt consolidation is only one strategy that might help you alleviate debt-related struggles or worries. Accept that there’s rarely ever a perfect solution – every option has its downsides. Think strategically about your position in retirement. Consider what you want your life to look like in the long-term. Take an honest look at any debt you owe and where it came from. Recognize your spending habits so that new problems don’t appear when trying to solve old ones. And understand the consequences of breaking down your debt – for example, the impact it might have on your credit score or the difference between long-term interest rates and lower introductory interest rates.

Calculate a realistic budget. There’s never a bad time to revisit your financial budget. To work out if debt consolidation is possible – let alone advantageous – you need to have a strong sense of how much your monthly outgoings are, the total payoff period for any long-term debt owed and how much you stand to pay in interest or other charges. When calculating your budget in retired life – which should include any debt payments – start by categorizing your expenses based on how essential or important they are to you. As you consider your long-term financial goals, having a budget to refer to will make it clearer if debt consolidation methods like a loan or balance transfer credit cards will lead to more affordable monthly payments.

Seek support to improve your credit score. Debt consolidation typically requires applying for a new loan or credit card. With that comes a hard credit inquiry that might cause your credit score to dip. However, if consolidating your debt helps you to meet your monthly payments, pay off revolving lines of credit or even make early lump sum debt payments, your credit score may gradually improve over time. If you’re able to find a credit card to consolidate your debt with zero-percent introductory APR, you can eliminate the interest you pay for a time. This debt consolidation strategy might lighten your overall financial load and help you live life to the fullest in retirement.

We want to help make sure you’re on track to reach your financial goals. Now is a great opportunity to identify if there’s anything else we can help you pursue. Remember, we are here for you year-round. To talk further or to schedule a no-obligation discovery meeting please contact us via this website.