Pension expert describes a ‘key thing’ for stress-free golden years

Do you want a stress-free pension? Don’t let this one thing go into your golden years, according to an expert.

“The most important thing we tell our clients is that when you retire, your debt needs to be paid off too,” Ken Moraif, senior advisor to Retirement Planners of America, recently told Yahoo Finance Live. “We really encourage people to be debt free, no car loans, no credit cards, no home loans and completely debt free.”

Not carrying debts during retirement protects your assets and livelihoods from economic uncertainty. If your retirement coincides with a recession, banks and lenders can’t always extend goodwill and interrupt mortgage or other debt payments, Moraif said.

Not owing money during retirement is the most important strategy for protecting your wealth and livelihood from economic uncertainty. (Photo: Getty)

“Having no debt — when bad things come — technically you can live on very, very little if you have to if you’re not in debt,” he said. “Because it doesn’t matter how well you’ve done to achieve that if you take a big gigantic loss, like a 2008 or a Y2K or other, that can affect your ability to retire or stay in retirement.” .”

Last year, 46% of retirees had some form of non-mortgage debt, such as credit card debt, car loans, student loans or medical debt. an annual survey of retirees from the Transamerica Center for Retirement Studies. Nearly a third of those have between $1 and $10,000 in debt, while 14% percent owe $10,000 or more. The estimated median non-mortgage debt was $3,000.

Another tenet of retirement planning: preserving your home’s equity.

According to the Transamerica survey, nearly a quarter of retirees have mortgage debt, with a median amount of $42,000.

Moraif emphasizes that having equity “enables a lot of strategic decisions,” such as deploying a home-backed loan for someone who is short on cash or selling and “taking the difference in what they sold for and investing that to generate income.” to create.”

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Stephanie is a reporter for Yahoo Money and Dinner, a new personal finance website. Follow her on Twitter @SJAsymkos.

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