As you prepare to enter retirement, your plans may not include dealing with the realities of debt. Most people enter retirement with some debt they have been handling for years, only to discover that the reduced or "fixed" income of a pension, 401k or Social Security makes paying those monthly bills far more difficult than they anticipated. Adding new debt due to an unexpected medical bill can become a substantial threat to your financial stability.
While entering retirement with outstanding debts can be stressful, it is also all too common, and similar concerns could leave you in search of some much-needed relief. In this, you are not alone, as bankruptcy filings among individuals over the age of 65 have tripled over the past 30 years alone.
Risks you may face when entering retirement in debt
Struggling under the weight of debt can be a stressful and daunting process regardless of your age. However, as you approach retirement, you may face some challenges that are unique to your situation, some of which may include:
- Living on a fixed income: After entering retirement, you may be living on a fixed income, and high amounts of debt can place a heavy burden on your finances.
- Rising medical costs: The costs associated with medical care are constantly rising, and even routine check-ups can leave you feeling financially drained.
- Delay in benefit disbursement: The delay in availability in retirement benefits could also leave you with concerns about your financial future and make it difficult to meet financial obligations.
- Less ability to earn: In the later years of life, your options for earning additional income to help cover your financial needs may also decrease.
- Presence of family: If you have children or grandchildren, you may wish to provide them with financial aid at times, but substantial amounts of debt can leave you feeling limited.
This combination of challenges could leave you facing a seemingly insurmountable financial obstacle, and you may worry that you will carry your debts throughout the rest of your life. However, by seeking guidance on your available options, you might be able to work back toward financial stability.
Protecting your retirement
You may wish to pursue relief from your debts and protect your financial future, but with numerous options to consider, choosing the best path can be a daunting task. You could choose to consult with someone with intricate knowledge of federal and Tennessee state bankruptcy laws for guidance. By obtaining advice from someone with experience in such matters, you could find yourself better prepared to reduce or eliminate your debts and enter retirement with financial peace of mind.