Debt Consolidation and Reduction

A Debt Management Solution to Save You Money in Retirement

Debt consolidation is the process of combining all of your outstanding debts into a single account. While bill consolidation is convenient, the best benefit of debt consolidation is that it can save you money by lowering the interest you pay and in some cases making the interest payment tax deductible, which should dramatically improve your retirement financial plan.

In fact, you should not really retire when carrying high-interest debt -- particularly credit card debt. Most people in retirement are living on a fixed income -- meaning that you will not have more money tomorrow to pay off the debt than you do today. (You will simply be paying more interest -- wasting money every month you carry the debt.)

The average household with members between the ages of 55 and 64, who should be planning retirement, and who carry credit card debt, spend 31 percent of their income on servicing the debt. In retirement, most people will find that to be a very heavy burden.

Debt consolidation can save you money by lowering monthly payments, reducing the amount of interest you pay and/or shortening the amount of time you have money borrowed. All of this will save you money, strengthen your finances, and improve your retirement planning.