In response to:

Should You Get out of Debt Before Retiring?

LawEconUSMC Wrote: Aug 29, 2012 12:45 PM
This is a horrible generalization. It's all about cash flow and assets. If you lose your source of income tomorrow can you repay the debts and maintain your lifestyle? If not work to get rid of all the debt. There is no such thing as good debt when you are older UNLESS you do not need the debt and can satisfy not just the current payments, but the total amount of debt out of liquid assets without it affecting your lifestyle. People over 65 just do not have the time or expertise to recover from losses to investments. Theoretically taking out debt at a lower interest rate then you will realize from an investment is "good" debt (this does not include a home mortgage from which a retiree will get very little benefit. Bad Advice!

Dear Carrie: I'm turning 55 this year and starting to think more seriously about retirement. I currently have a mortgage, a car loan, some credit card debt and even a small balance on my student loans. Should I try to pay all of this off before I retire? --A Reader

Dear Reader: This is an excellent question, particularly in light of statistics from the 2012 Retirement Confidence Survey sponsored by the Employee Benefits Research Institute. Survey results show that 45 percent of retirees report feeling financially stressed, principally because of their level of debt.

Debt, in itself, isn't necessarily negative. In fact,...

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