For many people, retirement means living on a fixed income that comes from Social Security or a pension. Unfortunately, this is almost always significantly less than your income when you were working full-time. What happens if you retire with debts? Your income may be less, but debts may remain the same, which can lead to a few missed payments. If you don’t pay off all your debt before retirement, you could be experiencing some financial stress.
Your Social Security and pension cannot be garnished as a paycheck can. However, debt collectors may request a bank levy from the courts. If granted, that would allow them to take funds directly out of your bank account to repay the debt. A debt collector probably won’t go this route, depending on the size of the debt, because of the long and costly process. Should a creditor levy your bank account, however, it’s in your best interests to connect with a local attorney.
According to the Motley Fool, “We tend to think of debt as a younger person’s problem, but in reality, it impacts seniors to an unhealthy degree. An estimated 30% of seniors 65 and over still have a mortgage, and as of 2015, 2.8 million seniors aged 60 and older were on the hook for student debt.”
“The problem, of course, is that when you carry debt into retirement, you not only lower your chances of ever paying it off but also risk struggling financially when your debt payments monopolize too much of your limited income.”
So, if you’re about to retire and haven’t managed to pay off your various obligations, here are some tactics that will help you:
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