Should you get out of debt before you retire? Here’s what you need to know

Should you get out of debt before you retire? Here's what you need to know

For most, debt is unavoidable during at least one point in their lives – whether it should be in retirement, however, is highly debatable. 

There are two types of debt: “good” debt and “bad” debt. Broadly speaking, good debt is for necessary, reasonable purchases that will improve your life, such as a low-interest debt for higher education, an affordable home or car. The latter is debt with high or variable interest rates that is used to purchase discretionary items or things that lose value quickly. Credit card debt is often an example of bad debt. Many Americans may think they need to pay off all of their debt before retiring, but that’s not necessarily true. It comes down to the type of debt, the interest rates and whether or not the repayments fit into a retiree’s fixed budget. 

“There are a lot of misconceptions about debt and retirement, largely stemming…

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