James Miller | October 19, 2022
Summary: Are you trying to retire without any debt? Here iss SoloSuit's guide on 4 steps to follow to enjoy a debt-free retirement.
There are three things in life you can't get away from: taxes, death, and student loans. While secretly hoping the next celebrity showing up at your graduation might cover for the third, we're here to encourage you that there's still life to look forward to in the years ahead in case that celebrity doesn't show.
More importantly, the last thing you want is to be stuck in the limbo of paying off debt versus saving up for retirement. This is why there are still feasible ways to make sure you can get out of debt before you finally decide to take on retirement—be it an early one or not.
401(k) is a private retirement fund for qualified employees as worked on collectively through shared profits. It is a safer retirement investment since it is protected by the Employee Retirement Income Security Act (ERISA) from employer-related issues such as litigation against an employer or bankruptcy. The only catch is that it isn't fully free from government takeovers.
The government takeover of 401k is dependent on two important factors: how the retirement fund was paid (through Roth accounts or traditionally), and if the retirement fund was claimed earlier than its maturity date (aka early withdrawal penalties).
If you fail to pay your taxes, have been convicted of a federal crime, or have overlooked paying child support or alimony, there are instances where the government can take from your retirement fund. You should avoid these three things in order to secure your 401k.
You're finally working and earning your salary–that is a huge milestone! But also, this is just a short way of saying, “Welcome to the limbo of not knowing how much debt to pay off versus how much to secure as retirement savings.”
We've been there, and it can be pretty overwhelming. As you work to make ends meet, you are also trying to ensure that there's a point in life where you won't have to be in this state anymore. That's why we're here to help.
Here are 4 ways to ensure that you retire debt-free.
You'll know you can retire peacefully if you fully pay off your credit card. The best place to start paying off your credit card is to stop using it. Unless an emergency requires you to use it, don't. Practice living off the cash you have instead of the credit limit given to you.
That said, be more mindful about how much and where you use your card. With the current 20% interest rate, you will want to reconsider using your card for purchases beyond the cash you have in your pocket.
That way, you can start paying it off without adding any to the current bill. Additionally, purchases that offer a 0% interest won't feel tempting anymore, once you've developed the habit of living off of the cash that you're actually earning.
Being able to fully pay off your student loan and clearing your name (and your co-signer's name) is usually one of the most important benchmarks to gauge that you are financially ready to retire. But how do you go about this?
One baby step you can take is first to check just how much your current payables are and your exact terms for paying them.
The National Student Loan Data System (NSLDS) website can give you access to your data, given that you also have a Federal Student Aid identification. In case your loan is from a private organization, you can still have access to your information through your credit report.
An extra tip about paying off your student loan is to do so only when you're scheduled to do so. This is because, unlike a mortgage, your student loans have interests that are not necessarily taxable.
Oftentimes the little things end up making the biggest difference. This is the same with car loans with relatively lower interest than a mortgage, an outstanding credit bill, or a student loan.
A better way to look at it is to realize that car loans are usually the easiest loan to start paying off. Another would be to do a quick lifestyle check: you might not need to own two cars. Selling one of your cars not only helps you to save up on car insurance, but it can also help you pay off the other car.
A morsel of wisdom that will help keep your hope is that there's a higher chance you'll be replacing your car by the time you retire, and you'll need a good amount of savings to get that upgrade someday.
Nothing feels more like home than a mortgage-free home.
Retirement is your season for rest, relaxation, and recreation, and whether you're planning to spend that traveling the world or cozying around, your home will definitely be a place you'll most likely still spend most of it. This is why it is crucial to pay off your mortgage before you hit the sack.
As much as tapping into your 401k might seem very tempting to use it to pay this one-off, that might not be the smartest move. Keeping your retirement fund intact means it can still grow to a higher return instead of deducting from it and also paying an early withdrawal penalty fee.
You have three options to approach this touchy topic:
Paying off your mortgage before retirement will make those restful years at home feel even more peaceful.
There's work to do now for a more relaxed future ahead. The key is to be able to achieve that balance between working hard to save up for retirement, but also being able to live and breathe in the present. A good lifestyle check, every now and then, will prove to be useful. And in case of any unfortunate life events involving your debt repayment such as debt collection lawsuits, use SoloSuit to respond in just 15 minutes.
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now or are just looking for support, we're here for you.
>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
Is your credit card company suing you? Learn how you can beat each one.
Going to Court for Credit Card Debt — Key Tips
How to Negotiate Credit Card Debts
How to Settle a Credit Card Debt Lawsuit — Ultimate Guide
Need more info on statutes of limitations? Read our 50-state guide.
Why do debt collectors block their phone numbers?
How long do debt collectors take to respond to debt validation letters?
What are the biggest debt collector companies in the US?
Is Zombie Debt Still a Problem in 2019?
If a car is repossessed, do I still owe the debt?
Is Portfolio Recovery Associates Legit?
Is There a Judgment Against Me Without my Knowledge?
Should I File Bankruptcy Before or After a Judgment?
What is a default judgment?— What do I do?
Summoned to Court for Medical Bills — What Do I Do?
What Happens If Someone Sues You and You Have No Money?
What Happens If You Never Answer Debt Collectors?
What Happens When a Debt Is Sold to a Collection Agency
What is a Stipulated Judgment?
What is the Deadline for a Defendants Answer to Avoid a Default Judgment?
Can a Judgement Creditor Take my Car?
Can I Settle a Debt After Being Served?
Can You Appeal a Default Judgement?
Do I Need a Debt Collection Defense Attorney?
Do I Need a Payday Loans Lawyer?
Do student loans go away after 7 years? — Student Loan Debt Guide
Am I Responsible for My Spouses Medical Debt?
Should I Marry Someone With Debt?
Can a Debt Collector Leave a Voicemail?
How Does Debt Assignment Work?
What Happens If a Defendant Does Not Pay a Judgment?
How Does Debt Assignment Work?
Can You Serve Someone with a Collections Lawsuit at Their Work?
How Many Times Can a Judgment be Renewed in Oklahoma?
Does Debt Consolidation Have Risks?
What Happens If You Avoid Getting Served Court Papers?
Does Student Debt Die With You?
Can Debt Collectors Call You at Work in Texas?
How Much Do You Have to Be in Debt to File for Chapter 7?
What Is the Statute of Limitations on Debt in Washington?
How Long Does a Judgment Last?
Can Private Disability Payments Be Garnished?
Can Debt Collectors Call From Local Numbers?
Does the Fair Credit Reporting Act Work in Florida?
The Truth: Should You Never Pay a Debt Collection Agency?
Should You Communicate with a Debt Collector in Writing or by Telephone?
What Happens After a Motion for Default Is Filed?
Can a Process Server Leave a Summons Taped to My Door?
Need help managing your finances? Check out these resources.
How to Make a Debt Validation Letter - The Ultimate Guide
How to Make a Motion to Compel Arbitration Without an Attorney
How to Stop Wage Garnishment — Everything You Need to Know
How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)
Defending Yourself in Court Against a Debt Collector
Tips on you can to file an FDCPA lawsuit against a debt collection agency
Advice on how to answer a summons for debt collection.
Effective strategies for how to get back on track after a debt lawsuit
New Hampshire Statute of Limitations on Debt
Sample Cease and Desist Letter Against Debt Collectors
The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah
West Virginia Statute of Limitations on Debt
What debt collectors cannot do — FDCPA explained
Defending Yourself in Court Against Debt Collector
Arkansas Statute of Limitations on Debt
Youre Drowning in Debt — Heres How to Swim
Help! Im Being Sued by My Debt Collector
How to Make a Motion to Vacate Judgment
How to Answer Summons for Debt Collection in Vermont
North Dakota Statute of Limitations on Debt
ClearPoint Debt Management Review
Indiana Statute of Limitations on Debt
Oregon Eviction Laws - What They Say
CuraDebt Debt Settlement Review
How to Write a Re-Aging Debt Letter
How to Appear in Court by Phone
How to Use the Doctrine of Unclean Hands
Debt Consolidation in Eugene, Oregon
Summoned to Court for Medical Bills? What to Do Next
How to Make a Debt Settlement Agreement
Received a 3-Day Eviction Notice? Heres What to Do
How to Answer a Lawsuit for Debt Collection
Tips for Leaving the Country With Unpaid Credit Card Debt
Kansas Statute of Limitations on Debt Collection
How to File in Small Claims Court in Iowa
How to File a Civil Answer in Kings County Supreme Court
Roseland Associates Debt Consolidation Review
Do Debt Collectors Ever Give Up?
Can They Garnish Your Wages for Credit Card Debt?
How Often Do Credit Card Companies Sue for Non-Payment?
How Long Does a Judgement Last?
How Long Before a Creditor Can Garnish Wages?
How to Beat a Bill Collector in Court