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Debts to pay off before retirement

Florida residents might want to consider paying off as many debts as possible before they retire so they will not be saddled with these obligations on a fixed income. Paying off a mortgage can be particularly significant in allowing a person more disposable income after retirement, and it may be possible to refinance and get a shorter term mortgage.

Almost 80 percent of baby boomers who had student loan debt reported that paying it off interfered with retirement savings, so this is another debt that it might be best to pay as quickly as possible. Individuals should also make an effort to reduce their credit card debt.

Over 25 percent of people in the 55-to-64 age group owe money on their vehicles with a median debt of about $10,000. Medical debt is another issue. The median owed by the 9 percent of people 65 and older who have medical debt is $1,000. This can sometimes be negotiated down to a lower amount.

People who are overwhelmed by debt might want to talk to a lawyer about their options. Bankruptcy may be one possibility, and filing for bankruptcy can also free up an individual’s ability to save for retirement. Some people may feel that declaring bankruptcy is irresponsible, but people can fall behind on their payments for many reasons such as divorce or job loss. Bankruptcy can be a financially responsible choice and may allow an individual to make a fresh start. Of the above debts, student loans are difficult to discharge in a bankruptcy, but they might be able to be reorganized under a Chapter 13 repayment plan prepared with the assistance of a lawyer and approved by the court.

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