Your financial situation determines whether retirement is an endless vacation, or a lot of stress and only a little less work.

Having debt in retirement is a surefire way to fail to retire rich. It's best to dump debt before you stop working, said Steven Repak, a certified financial planner based in Charlotte, N.C., and author of "6 Week Money Challenge: For Your Personal Finances."

"If you have no mortgage, no credit card debt and no car payments, it may help reduce the risk of you running out of money during retirement," financial plannerSteven Repak said. "That's why the goal of having no debt by the time you retire should be at the top of your list."

Following are tips for getting rid of debt so it won't create financial anxiety that ruins your golden years.

1. Take an Objective Snapshot of Your Current Finances

If you don't know where your money is going, you'll have a tough time making the key changes needed to retire debt-free. So take an objective and thorough look at your finances, said Aaron Hatch, a certified financial planner and co-founder of Woven Capital in Redding, Calif., a fee-only financial planning and investment management firm.

"Get real honest with yourself about your finances," he said. "Pretend you are a business and look at your finances as objectively as possible."

For instance, Hatch said you should use two retirement hacks: create a personal balance sheet and document your cash flow.

Your balance sheet is simply your assets compared to your debt, or liabilities. The difference is your net worth. That number should be a big positive by the time you retire.

Cash flow is a better term for a budget, said Hatch. At this stage, you want to know where your money is coming from, which is probably easy to determine. You also want to know where your cash is going, which is more difficult. Plenty of free apps are available to help with this phase. They include Mint and LearnVest.

This step can be revealing. Hatch said you might be shocked at how much you spend on restaurants, or how much money is being pulled out of your account for automatic payments.

2. Assess and Align Your Values and Goals

Before you implement drastic changes, Hatch suggested making sure those modifications not only move you toward financial freedom, but also result in a happier, more fulfilling life. "As with any financial and life decision, there are trade-offs that need to be considered," he said. "So it's good to start with what you value most."

Your preferences will determine exactly how much money you need before you retire. For example:

  • Do you love working, but just want more flexibility?
  • Do you want a quiet life of gardening, or do you plan to travel full time?
  • How important is it to leave a legacy for your kids or community?

Only after you honestly answer these questions in writing will it be possible to move forward with a plan to make retirement as fulfilling as it is fiscally sound, Hatch said.

3. Reduce Your Housing Expenses by 15 Percent

Most people find that housing and related costs are their largest expense, Repak said. Things included in this category are:

  • Mortgage or rent
  • Homeowners or renters insurance
  • Cable TV and internet
  • Phone and utilities
  • Renovations and repairs

Typically, people can find plenty of ways to save here, Repak said. For example, you might be able to save hundreds of dollars each month by refinancing before mortgage rates rise. Or if you rent, consider downsizing to a less expensive place.

Other ways to save include canceling cable TV service, getting rid of your landline or switching to a prepaid cellphone plan. You might even consider downsizing your home to reduce on maintenance and repairs.

"By just reducing 15 percent of household expenses, the average household could save about $3,700 a year," Repak said. That money can go toward reducing credit card debt, contributing to a 401k or IRA, or just buying something like gardening tools for retirement.

4. Reduce Your Miscellaneous and Personal Expenses

Having your true goals and values down in writing — alongside your balance sheet and cash flow statements — makes it much easier to trim things that aren't really important, Hatch said.

Look for nonessentials in the miscellaneous and personal expenses area. "For example, expensive hobbies, traveling, entertainment and gifts," Repak said. "These may be some of the places where spending can add up very quickly."

This is not to say you shouldn't spend money on fun, Repak said. After all, where is the fun in that? Instead, just make sure all spending is in line with your values or goals. For example, dine out once a month instead of once a week, or play golf every second Sunday. Cutting back might even make the times you indulge more meaningful.

5. Always Pay More Than the Minimum Balance

Paying more than the minimum balance — especially on your credit card debt — is probably mandatory for you to retire debt-free, Repak said. Doing so will take discipline.

Although the interest rate on your credit cards probably is high, the minimum payment each month is relatively low — usually from 1 to 3 percent of your balance. So there is little pressure to pay down your debt. It's also revolving credit, which means it's easy to add to the debt each month and never see your balance decline.

"When it comes to credit cards, you must pay more than the minimum payment or you could be in debt for the rest of your life," Repak said.

Deciding not to use credit cards is one way to solve this problem. Putting your credit cards on ice is also good practice for retirement, when you will be on a fixed income and self-control and fiscal responsibility will become your mantra.

6. Choose a Debt-Payoff Strategy That Suits You

The best plan in the world is worthless if you don't stick to it. So pick a strategy that suits you. First, analyze your debt, Repak said. Write down:

  • The balance of each debt
  • The interest rate of each debt
  • The minimum payment you need to make in order to stay current
  • The actual payment you are making on each debt.

Debts might include everything from auto loans and home loans to personal loans and credit cards.

Next, choose a plan. "If you have multiple credit cards or loans, one option is to pay more towards the debt with the lowest balance and pay less towards the debt with the larger balances," Repak said.

Such an approach is sometimes called the "snowball" strategy. The idea is that paying off smaller balances first gives you motivation to tackle larger sums later. If you tend to get defeated when goals don't come fast, this strategy might be good for you.

Another strategy is to pay off the debt with the highest interest rate first. This is a practical approach that aims to minimize interest incurred. To illustrate, Hatch cites the example of someone who is paying 15 percent interest on credit card debt.

"By paying off the credit card, you are effectively paying 0 percent interest — so you've just effectively made 15 percent on that money," Hatch said. "No investment can give you that guarantee." If you want to maximize your interest savings, this is the strategy for you.

7. Name Your Savings Accounts

You are going to need savings to retire, whether it's to bolster your monthly income or for emergencies such as unexpected medical bills or car problems. But it might backfire to have one ambiguous fund into which you dump all your extra money.

"Create separate savings accounts and give them a purpose and name them," Hatch said. "You'll have better luck sticking to your savings goals if you can visualize what the money will be used for."

So, name one fund your "Tahiti Trip Fund." Other funds might be your "Weekly Golf Game Fund," or the "I Just Want to Have a Nice Dinner Out For Once Fund." Use any name that motivates you to sock away money.

Just make sure your first savings account is named the "Emergency Fund," Hatch said. Repak agreed, suggesting that 5 to 10 percent of your income should go toward your emergency fund.

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