Three Ways Debt Can Derail Your Retirement Plans

missed the train

Photo: William Anderson via flickr

When it comes to your finances, debt is one of the things that can hold you back the most.This is especially true when it comes to your retirement.

Here are three ways debt can ruin your retirement years:

1. Debt can delay your retirement. First of all, having debt can delay your retirement altogether.

If you are still struggling to pay the bills, how can you retire?

You won’t have enough money to meet your obligations.

When you have debt at the age you wish you could retire, retirement is only a dream. It’s not something you can make a reality. You have bills to pay, and for that you need regular income. And that means a job.

Make a plan now to pay off your debt so that you won’t have to postpone retirement. The longer you delay your retirement, the greater the chance that your health with decline to the point where you can’t enjoy your time when you finally do get to retire.

2. Debt restricts your retirement choices. When your resources are already spoken for, you have fewer choices. When you have debt, whether it’s a mortgage, car loan, or credit cards, you have to make that payment. That’s money that you can’t use for something that you actually want to do.

Debt makes your financial options more limited. You can’t live where you want to, travel as often as you would like, or really enjoy your hobbies. The money you would have spent enjoying your preferred retirement activities is going right into someone else’s pocket, as you pay what you owe, plus interest.

If you work to pay off your debt before retirement, you will have more disposable income to use how you want to. This is a definite advantage when it comes to enjoying your retirement.

3. Debt weighs on your mind. Debt can weigh on your mind, making your retirement much less enjoyable overall. When you have debt, it hangs over your head.

You know that you owe the money, and you might even stress about how to meet your obligations. If you decide to retire even before you pay off your debt, you can feel trapped, and worried about what comes next.

The way that debt weighs on your mind can lead to anxiety issues, and even health issues. All that worry, plus continuing to work, can mean that your body breaks down sooner. Your health can suffer. And poor health means bigger bills, so your financial issues are compounded.

Debt can weigh on you to the extent that it begins to affect your relationships, and lead to strain between you and your loved ones. Those sorts of things can really put a damper on your retirement years. It’s supposed to be fun, but if you have debt hanging over you, it can really destroy some of the excitement of retirement.

Instead of letting debt rule your life, you need to take charge and pay off your debt fast. Look at your finances, and do what you can to avoid high levels of debt. Make a plan to pay off as much debt as possible before you retire. Your finances will be more stable, and you will be able to better enjoy your golden years.

Jeff Rose is a certified financial planner and writes about financial planning topics at Good Financial Cents. His latest project, The Debt Movement, is to help people pay off $10 million of debt in 90 days. You can join the movement and get a chance to earn some of the $15,000 debt scholarship money by visiting

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