Faith & Finance - Don’t Carry Debt Into Retirement
Paying off debt is always a smart financial move—but eliminating it before retirement is one of the best decisions you can make. With more people than ever retiring with debt, financial security in retirement is at risk. Let’s explore why carrying debt into retirement can be problematic and what you can do to avoid it.The latest statistics reveal a concerning trend. According to the Federal Reserve's 2022 Survey of Consumer Finances, 65% of individuals aged 65 to 74 carry debt—a significant increase from 50% when the Fed began tracking this data 35 years ago.Debt in retirement severely limits lifestyle choices and, for many, leads to an unwelcome necessity: returning to work. A study by T. Rowe Price found that 20% of retirees have gone back to work full-time or part-time, and another 7% are actively looking for jobs. The primary reason? They need more income.Inflation has only worsened the situation. Prices today are around 15% higher than they were three years ago, catching many retirees off guard and stretching already tight budgets—especially those burdened with debt.As Proverbs 22:7 warns, “The rich rule over the poor, and the borrower is the slave of the lender.” To avoid financial hardship in retirement, it’s critical to develop a strategy now to eliminate debt.How to Eliminate Debt Before RetirementIf you’re 5, 10, or even 15 years away from retirement, now is the time to set a goal of becoming debt-free. A debt-free retirement provides the financial margin necessary to weather economic downturns, stock market fluctuations, and rising costs of living. Here are practical steps to achieve that goal:1. Reduce Your ExpensesA budget overhaul can reveal unnecessary expenses you’re paying out of habit. Cut subscriptions, eat out less, and find ways to live within your means.2. Increase Your IncomeConsider taking on a side job, selling unused assets, or even delaying retirement by a few years to maximize savings and accelerate debt repayment.3. Downsize Your HomeOne of the most impactful moves is downsizi