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Efficient Steps to Reduce Your Debt before You Retire

Updated: Nov 12, 2022

We all know that one of the main goals in life is to retire with as little debt as possible. However, achieving this goal in today's world can be challenging. With the cost of living rising and wages stagnating, many people find it difficult to make ends meet, let alone save for retirement.

Debt can be a major financial burden, especially as you approach retirement. It's crucial to develop a plan to pay off your debts before you retire so you can enjoy your retirement years without the stress of financial obligations.

As you approach retirement, it's essential to take steps to reduce your debts. By doing so, you can retire with peace of mind and enjoy a comfortable retirement.

Here are some tips to help you reduce your debts before you retire:

1. Know How Much You Need to Pay

One of the first steps to getting out of debt is to know exactly how much you owe. It may seem like a daunting task, but it's essential to have a clear understanding of your financial situation.

Once you know how much you owe, you can start creating a plan to pay it off. If you're unsure where to start, several online calculators can help you figure out how much you need to pay each month to become debt-free.

2. Prioritise Your Debts

Once you know how much you owe, you must prioritise your debts. That means you must first focus on paying off the debts with the highest interest rates.

Paying off high-interest debt should be your top priority because it will save you the most money in the long run. You may want to consider consolidation if you have multiple debts with different interest rates.

3. Create a Budget

Creating a budget is one of the best ways to get out of debt. When you have a budget, you'll have a clear understanding of your income and expenses. That will help you make informed decisions about where to allocate your money.

Many online budgeting tools can help you get started if you're unsure where to start. Once you have a budget in place, stick to it as closely as possible.

4. Cut Back on Expenses

To become debt-free, you need to start living below your means. That means you need to find ways to cut back on your expenses. One way to do this is to track your spending for a month. At the end of the month, review your spending and see where you can cut back.

5. Find Ways to Make Extra Money

If you want to become debt-free, you need to find ways to make extra money. There are a few ways to do this:

  • Get a part-time job

  • Sell items you no longer need

  • Do odd jobs for people in your community

Making extra money will help you to accelerate your debt payoff.

6. Attack Your Debt

Once you have extra money coming in, you need to use it to attack your debt. The best way to do this is to focus on your highest interest-rate debt first.

Make the minimum payments on all of your debts, but put extra money towards the debt with the highest interest rate. Once that debt is paid off, you can move on to the next highest interest rate debt.

7. Stay Motivated

Paying off debt can be a long and challenging process. It is important to stay motivated throughout the process.

One way to stay motivated is to set small goals. For example, you may set a goal to be debt-free in five years. As you reach each milestone, celebrate your success. That will help you to stay on track.


It is important to pay off your debts before retirement. Doing so will give you more financial security in retirement and reduce the stress you may feel about your finances. There are a few different ways to pay off your debts, and you should work with a financial advisor to find the best option for your situation. Trying to pay it all off before retirement may seem daunting if you have a lot of debt. However, it is possible to retire debt-free with perseverance and a solid plan. That will give you peace of mind in retirement and help you enjoy your golden years to the fullest.

If you need help with your retirement planning in the Gold Coast and Yeppoon area, contact us. Swell Financial Planning is a company that provides financial planning services to clients locally and around Australia. The company tailor-makes solutions to help clients achieve their dreams in the most efficient way possible. They look to provide solutions that best meet the client's needs and are not compromised by any incentives to recommend one product over another.


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