For many people, the target at the end of their careers retire completely without debt. This means that monthly credit payments, interest rates and late fees, or the impact of these balances on your credit score. Essentially, there is no more cost to enter your retirement savings.
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The payment of the debt is usually easier than making. But the good news is that you do not have to wait until retirement to be without debt. In fact, there are some debts you should try to pay well in advance. Think of it as a debt reimbursement triaage. Doing this can alleviate financial stress and make extra money in your pension accounts.
Gobankingrates spoke with Allan McNABB, an individual from Baby Boomer Generation, about the debts that people believe before they retire. As you start Your debt repayment journeyYou should check what to say.
Former retired and current vice president Image Creation MediaAllan McNabb proposed to retire soon, and if possible, he aims to finish paying their homes.
McNABB continued, “it is very important to pay your mortgage before retirement,” he continued. “I always believed in the peace that has always had your home.”
McNabb even remembers the last mortgage payment in 2023. “As if a weight has been removed from my shoulders, now knowing that I have my house and we don’t have to worry about these payments during retirement.”
Many other financial experts recommend getting rid of this mortgage payment before retirement. Inside Dave Ramsey’s 7 baby steps The Money Management Plan requires early payment of your sixth step Mortgage. His advice is to first save interest in interest and the latter to be without debt (except mortgage), including all other debts-automobiles and student loans.
“Debt will destroy your early retirement plans, Ram Ramsey wrote. “Eating your monthly income and retirement will evacuate your savings.”
As of July 2025, the average mortgage rate on a 30 -year -old loan was 6.67%. The average home sales price in the USA is $ 522.200 (for May 2025). Here is an example of how your monthly and total payment can look in such a house (except taxes, insurance and hoa fees):
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You have left a loan of $ 416,000 by paying a 20% down payment of $ 104,000.
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Your monthly payment amount will be about $ 2,710 (principal and interest).
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The total amount of the total amount of the total amount of over 30 years will be $ 416,000 and the total interest paid will be $ 557.332. This is $ 973,332 (including interest).
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Now, tell me you’ve reduced it to 15 years. This is 416,000 dollars towards the manager and $ 247,451 for interest. Your total fees will be $ 663,451 (including interest).
Even if you cannot pay your loan early, release that $ 2,710 per month can make you easier in the retirement lifestyle you want and help your pension funds can be much more stretching.
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Automatic loans are another debt that may come with high interest rate. According to Experian, the average annual percentage rate on a new car (this interest rate and other lending fees) was 6.58% as of last year. The average ratio in a used vehicle was also 11.17%.
If you’re still dealing with a car loan, definitely give priority to paying it. You can finally save thousands of interest rates.
As McNabb explained, “I saw that it is really useful to retire without owing anything in my vehicles. We don’t have to worry about car payments when your income is fixed.”
If you carry it to retirement, an example of the cost of a car loan cost:
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You fell 20% ($ 4,000) to a $ 20,000 vehicle and financed the rest with a five -year credit with a 7% APR.
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Your monthly payment will be about $ 317.
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At the end of the period, you will pay $ 16,000 for the vehicle itself and about $ 3,009.
Even if your main concern was, 317 dollars per month could turn to other, more important things in retirement. Also, it is difficult to put a price for peace of mind.
Finally, McNABB proposed to pay any credit card before retirement. According to the Consumer Financial Protection Bureau (CFPB), the average credit card interest rate is 22.8%. It was almost twice that it was ten years ago.
Credit cards are not a secret in which they may be a financial burden, but they can be seriously stressful when you retire and live with a fixed income.
McNABB said, “I have seen how much high interest rates can eat for your savings,” McNABB said. “I brought my credit card debt to a point as quickly as possible. Even before my retirement.
Debt may be stressful, but there are ways to alleviate the burden and pay well before retirement. Here are just a few:
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Reduce expenses and put more money on your existing debts.
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Follow Debt snowball method Pay your debts to the smallest balance (independent of interest) according to the smallest.
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Use Debt avalanche method Pay your debts according to the interest rate (highest to the lowest).
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Increase your income and put these extra earnings to pay your debts.
If you have already retired or approach retirement, it’s never too late to pay your debts. The key is to give you the most stress – financial, emotional, or otherwise – to give priority and be as disciplined as you go, depending on what it causes.
Depending on your income situation, you can also find local or community resources to help you. Consult your state government or non -profit organizations to see what is available.
Caitlyn moorhead He contributed to the report of this article.
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This article emerged at the beginning Gobankingrates.com: A retired Boomer: 3 debts you need to give priority to payment before retirement
