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Worried about running out of money inretirement?
Pay attention to that fear so that you’re able to prevent it from coming true.
You Still Have Unsecured Debts
Ideally, you want to retire entirely debt-free.
Its not necessarily the end of the world if you havent paid off your mortgage balance before retiring.
But unsecured debts, like credit card balances, personal loans and even student loans, spell trouble.
These debts typically come with far higher interest rates than secured debts, like home mortgages and auto loans.
In fact,LendingTreereported that the average credit card interest rate is a dizzying 24.43%.
You Cant Stick To a Budget
Some people just plain struggle with sticking to a budget.
Money burns a hole in their pocket.
As much trouble as that can get consumers into while working, it gets exponentially worse in retirement.
They cant as easily earn their way out of the problem by working more hours.
Try the envelope system, or use a combination ofcash and debit cardsonly.
Whatever you do, dont retire before you know how to live on a budget.
A 2024 study byT.
Have you budgeted for health costs in retirement?
If not, start adding that as a line item for your retirement budget and estimating realistic costs.
Adult children can quickly become a black hole in your budget.
This month, they come to you for help fixing their car.
Next month, its their insurance premium that they cant quite cover.
The next month, itll be something else.
Until they need to swim on their own, theyll keep tugging at your lifeline.
Note that means 25 times your post-retirement spending, not necessarily your current spending.
Still, saving 25 times your planned annual spending remains a solid back-of-the-napkin goal for retirement savings.
Dont gamble with your retirement.
You cant necessarily just go back to work if you discover halfway through retirement that you need more money.
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