It’swell known by retirement experts that debt is one of the factors that impacts our perception about a secure retirement and how to go about preparing for it.

In studies done by BlackRock, one of the world’s largest financial companies and the Employee Benefit Research Institute, the issues of debt and retirement income planning were explored in a survey.

Americans hold more debt now than at any other time in history. Credit cards, student loans, auto loans, home lines of credit, and other forms of debt.  All totaled estimated to be $15 trillion. While debt can be a useful tool to help us improve our life style, it can impact how we perceive saving for retirement.

The perception of debt is different across various income levels according to the research.  Higher income earners perceive debt as less of an obstacle than those who earn less.

Blacks and Hispanics of all income levels are more likely to have a level of debt that is higher relative to their income and thus seen as a problem.  This is compared to other groups.  62% of Blacks and 58% of Hispanics earning at least $75,000 see debt as an obstacle or at least a problem.On the other hand, nearly 50% of workers surveyed said when they feel their short-term finances are in order, they feel better about long-term finances.

Any debt influences how we save for retirement.  Italso affects how retirees think of their financial ability once they stop working.Thus, the way they think about spending their retirement income.

The desire to have enoughsecure retirement income to cover non-discretionary expenses in retirement is a key concernfor retirees.  Covering Health care,housing, and groceries, to name some are the most important concerns.

This points to the need for planning in the years before retirement.  And the sooner, the better. Getting rid of all discretionary debt is one of the most important “to do’s.” Monitoring all of your expenses with an eye toward those that can be eliminated without “pain.”  Try to estimate what new expenses you’ll have when you retire like health care, and other things that may not be as expensive now because you’re in and employer sponsored plan.

Find a financial professional who has experience in retirement financial/income planning.  He/she will be able to customize strategies for your unique situation.

They can help you look at both expenses and income strategies.

“You’ve worked hard for your money, make it work for you.”

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Pranjal Doorwar