Episode #9: Debt & Retirement

Today’s Prep:

We hear a lot about debt in the media. Some argue there’s a place for good debt, but the term carries a negative connotation as well. David explains.

(Click the featured times below to jump forward in the episode)

Equipping Points:

00:42 – The Media Buzz Surrounding Debt.

  • There’s a lot of buzz surrounding the world of debt. As an example, Dave Ramsey has made a career out of helping people get out of debt. He uses simple concepts to help listeners live debt-free, live beneath their means, and save for the future.

2:08 – David Shares The Story Of A Client Who Chose To Live Debt-Free.  

  • David had a client whose only debt was his home mortgage. He paid cash for his cars, and he paid off his house before the age of 55. He never made more than $100,000 a year, but he made savings a priority, and now, he’s able to live how he wants in retirement.

4:43 – Is There Such A Thing As Good Debt? 

  • We believe a home mortgage is a good kind of debt. We advise folks to get a low, fixed-rate mortgage, but owning a house is a good asset. If you go into debt to buy a business, it can also be good debt.

5:38 – Examples Of Bad Debt.  

  • Examples of bad debt include credit card balances and car debt. Basically, if you get a loan to buy stuff you can’t afford, you’re carrying bad debt. You should never buy more than you can afford.

6:43 – Should You Be Debt-Free Before You Retire? 

  • If you’re about to retire, and you still have three or four years left on your mortgage, that’s okay. Otherwise, you really should be debt-free when you retire. You don’t want to carry that weight and uncertainty with you into retirement.

8:17 – David Shares The Story Of A Woman He Helped Get Debt Free During The Retirement Planning Process.  

  • This particular client is 68, and she’s still working. We met her when she was 64, and she had some of that consumer debt we’ve talked about. She had a mortgage as well, but she was a pretty good saver. We built her a plan that would help her save more, pay off her debts, and begin withdrawing Social Security.

Today’s Takeaway:

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The host: David Dickens