"According to Orman, it is critical for everyone to eliminate 100% of their bills with mandatory monthly payments. Whether it is your home mortgage, a car note, credit card debt, or student loan payments, it is essential that you get rid of those payments first before you retire. When you are retired, you are essentially living on a fixed income."
"Orman wants you to make retiring that debt your focus and there is only one way to do it: live below you means, but live within your needs. We've likely all heard the first part of that statement and it is smart financial advice. It is not enough to live within your means, but you need to have more money coming in than is going out if you want to be able to save."
Retirement requires eliminating mandatory monthly payments such as mortgages, car loans, credit card debt, and student loans to avoid straining a fixed retirement income. Paying off these obligations before retiring preserves the ability to live comfortably on a limited budget. Prioritize retiring debt by living below your means while distinguishing between wants and needs. Having more money coming in than going out is essential for saving and financial stability. Reducing discretionary spending and focusing on necessary expenses increases the likelihood of a stress-free retirement.
Read at 24/7 Wall St.
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