3 debt issues to address before you retire and claim Social Security
Summary
Many older Americans are entering retirement with more debt than past generations, including credit card balances, mortgages, and personal loans. Before claiming Social Security benefits, retirees should focus on paying down high-interest credit card debt, addressing delinquent federal debts, and managing other debts to protect their retirement income.Key Facts
- Older Americans often retire with more debt than previous generations.
- Social Security benefits are a key income source for many retirees.
- High-interest credit card debt is especially costly in retirement due to fixed income.
- The average credit card interest rate is above 21%.
- Carrying credit card debt into retirement can reduce available money for daily expenses.
- Some debt relief options include consolidation, balance transfers, and structured programs.
- Federal debts like unpaid student loans or taxes can affect Social Security payments.
- Handling debts before retirement can improve financial stability when income is limited.
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