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Break the Shackles of Debt, Before Retirement

Posted by Advocate Debt Relief Team

2 years ago / April 6, 2022

Time is perhaps the greatest currency we have in the material world. Most of our lives we spend it working to create a sense of security with the hope that one day we too can retire. Inflation, gas prices, and raising food costs piled on top of our current debt-to-income ratio can feel like unbreakable shackles that prevent the reality of retirement.

Don’t let today’s challenges define your path for tomorrow. Before the debt shackles create a cluster-phobic panic frenzy, take a harder look at the situation. The key to breaking the restraints holding us back from retirement is to stop accumulating more debt, assess current debts, and create a plan to eliminate them before a grand exit from the workforce.

Manage Expectations

Depending on your situation, being completely debt free before retirement may not be in the cards. It doesn’t mean that all hope is lost. The first step is taking an honest inventory of your current lifestyle. If this isn’t already done, create a budget. A successful budget will help identify if you’re consistently borrowing to support your lifestyle and where you need to adjust to stop the chains of debt from getting heavier.

Top Debt Focuses

Once you’ve recalibrated to a lifestyle that fits a balanced budget, focus on the debts that can be eliminated or significantly reduced before taking the final bow from the workforce. Prioritizing where to focus your energy will pave a brighter path toward a more financially fulfilled second act.

Credit card debt

High interest credit card debt can be a fickle beast. They can tighten the debt grip, but they make retail transactions more convenient and safer, not to mention the appealing reward system. Develop a strategy to loosen the restraints.

Every dollar beyond the minimum payment goes toward the balance. Prioritize the credit card with the smallest balance, regardless of interest rate. Be sure to make at least the minimum payments on the other cards, but eliminating the smallest balances first will create the traction you need to loosen the credit card clutch.

Car loans

Cars are often a symbol of success and stability. Generally car loans cost less over time, compared to other debts, but a car depreciates the second it’s driven off the lot. Cars can also be additional leg irons that hold you down. The question becomes, “what kind of car do I need, not want?” If you’re willing to push past your own ego, embark on a strategy to reduce or eliminate that extra payment.

One tactic is to trade in a more expensive car for one that has a smaller payment or one you could own outright. Another route is to assess whether or not a second car is necessary, if you have one. Regardless, either path will free up additional income to put toward other debt that needs to disappear before retirement.


Let’s get this out of the way, most people retire with a mortgage. Mortgage rates are typically low and it gives you the potential of deducting the interest you pay on the loan and property taxes. A retirement plan might make us reconsider how much financial burden we want tied up in our home.

As we move toward retirement our current home will likely increase in value, pending it’s properly kept up, and we tend to need less space. The kids eventually move out, the big yard with mounds of upkeep is less appealing, and the list goes on. If a peace of mind is a greater priority than a piece of land, consider downsizing. A smaller mortgage payment, within reach of a pay off before retirement, can make all the difference. If downsizing isn’t an option, consider making off cycle mortgage payments toward the principal balance. As the years pass by, every dollar gets us closer to enjoying the golden years.

Student Loans

Why go into retirement still paying off student loans? The main point was to get a financially viable job that provides the opportunity for retirement. There are a couple of ways to strategically tackle student debt before retirement age.

Most federal and private student loan lenders offer a small reduction in your interest rate if you use auto-debit. This sets your bill amount to be drawn directly from your bank account every month. Not only does this ensure on time payments, you’ll get some savings out of the deal.

Take a look at student loan refinance offers. These often require a credit score in the high 600s and a steady income, but could either reduce your monthly payment or interest rate. Be sure to weigh the pros and cons. Certain federal benefits will be lost if you refinance and defaulting on the refinanced amount could have dire financial consequences.

Professional Help

Debt can feel like handcuffs digging into your soul. It can create a distorted view of our future, particularly retirement. It doesn’t have to be this way. A free evaluation from a professional might trigger a conversation that finds the best way to pick the lock. The only way to find out is to take action. Are you ready?

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Filed Under: Debt Relief