Do you have the opportunity to retire without the burden of high interest debt? If answered yes, you’ll be considered as one of the fortunate and lucky retirees. According to the AARP, most of the baby boomers have arrived at this age without concentrating on their savings. In the manner the recession wiped off the retirement savings, this is historically being deemed to be the worst time to retire. Over the last few years, most of the individuals who were born during the baby boomer period saw their finances decline and many of them are expectantly confronting a huge amount of debt on their multiple credit cards. While there are various options for the seniors, they should be watchful before choosing one so that they don’t die with huge amounts of debt. Here are some options that may work for them.
Non-profit debt consolidation firms
As the seniors live on a fixed income level, it is necessary that you save money while consolidating your debts too. Every penny that you own is extremely valuable for you and therefore consolidating your debts through a non-profit debt consolidation makes more sense than getting it done through the for-profit counterparts. As the non-profit firms are financed by the local business organizations and the credit unions, the fees that they charge is much lesser than the for profit companies. You can get the help of a professional debt consultant who will help you negotiate the interest rate and the monthly payments. You can simply repay the debt in small and affordable payments and become debt free within a specific period of time.
Take out a reverse mortgage
Being a senior, you’re blessed with the opportunity of taking out a reverse mortgage loan. This is somewhat similar to taking out a home equity loan but there are striking differences too. You can take out a reverse mortgage loan of the amount that you’ve accumulated as equity in your home but the difference is that you don’t have to repay the loan amount until you die, sell off the home or stop staying in your house. However, before you look at this option for seeking debt relief, you should ensure that your debt amount is pretty high so as to tap the equity in your house. If you can manage repaying in some other way, you may keep your equity intact for some other use.
Borrow from your 401(k)
You must have saved enough money in your 401(k) account so that you can borrow money during times of need. Since you have accumulated huge amount of debt on your credit cards, it is most obvious that you should borrow money from the 401(k) as withdrawing money after you retire will not make you subject to undue taxes. Therefore, you can easily withdraw money and use it for repaying your credit card debts.
Therefore, when you’re on the other side of 60 and you’ve racked up huge amounts on your credit cards, ensure following the steps mentioned above. Professional debt relief should be avoided when it comes to getting out of debt.