Before retirement, retire credit card debt

Scissors cutting credit card

As the economy inches toward recovery, the largest generation in American history is heading toward retirement.

And for some baby boomers, the Great Recession helped zap retirement savings, leaving them with fewer financial resources to support them through their golden years.

A survey of 200 Americans commissioned by CESI Debt Solutions, a national nonprofit credit counseling organization, found 59% had saved less than $50,000 toward retirement.

Some 35% had credit card debt when they retired. And after they retired, the survey found, 53% used credit cards to buy medicine or pay for doctors' visits.

Now, there isn't a debt elimination strategy in existence that will work if you continue to use credit cards to rack up debt.

If you're nearing retirement and find yourself increasing your credit card debt, it's time to focus on a repayment strategy.

Use our credit card calculator to determine how long it will take to pay off your balances if you stop incurring debt now.

Re-evaluate your budget. Before you pay off you debt, you must first re-examine your budget to find areas where you can cut expenses. This is especially challenging in tough economic times, but many households have some area of the budget that can be trimmed for additional savings. Direct these savings toward debt repayment.

Aggressive debt elimination. As retirement approaches, investment strategies tend to become more conservative to protect any savings while debt elimination strategies become more aggressive. This is necessary to ensure the high interest debt that threatens your future financial security is eliminated before entering your golden years.

Debt elimination has never been more important than it is today, as Congress is wrestling with retirement benefits in its debate over the national debt. You must rely on your own money management to ensure long term financial independence.