The Ideal Retirement is Debt-Free

When it comes to retirement, most of us can't wait to get there. However, so many workers aren't taking the necessary steps to get there.

Retirement is when you can relax and enjoy life for a while. Or at least, it is supposed to be. However, if you aren't prepared, your retirement could be something much different than what you had in mind.

Yes, financial advisors will tell you that you need less money in retirement, because you have fewer job-related expenses. But you will probably replace these expenses with other expenses.

On average, it is estimated that you will need approximately 70% of your current yearly income when you are in retirement. For example, if you make $50,000 a year, you can expect to need at least $35,000 a year in retirement. However, this can change with different circumstances.

Your medical expenses will be higher. Insurance will cost more as you age. You often have increased medical issues. It is recommended that you take care of your insurance needs while you are young, in order to help keep your premiums down later.

You will also want to spend more money on hobbies, vacations and other activities. You know have time to do the things you always wanted to do.

If you enter retirement debt-free, you are reducing the amount of money you need each month. This may free up money for the things you want to do.

Start with taking the time to eliminate your credit cards. You should try to pay off all of your credit cards before you retire. It is estimated that 30 million Americans have bad credit due to excessive credit card debt. You want to enter retirement with options. If you have bad credit and have maxed out all of your credit cards, you have very few options. Remember, credit card debt can grow on you rather quickly. What is just $20 a month now, can turn into $200 a month in a short amount of time.

Move on to making sure that you do not have any auto loans at retirement. A dependable car is necessary, but you should try to pay it off as quickly as possible. Choose a reliable, reasonably priced automobile. You don't have to buy new and you don't have to spend every last cent you can afford.