Debts to Avoid

Failing to properly budget for retirement can result in a brutal readjustment to a new reality.  One way to avoid a painful readjustment is to keep a lid on debt.  Here are four kinds of debt that can kill your retirement plan:

• Expensive colleges for your kids.  You may want to avoid saddling your kids with long-term debt, but you won’t be able to borrow in order to fund your healthcare and living expenses in old age.  
• Credit cards.  Consider long-term, low-risk investment returns instead of easy credit, which can double your debts in four years.  
• Moving to a better house.  Moving to a smaller house may make sense, but make sure it’s not a retirement-buster.  You may not be able to afford the condo on the golf course.
• Vacationing.   Wait to go on that round-the-world cruise for at least one year of retirement.  By then you will know more about your actual spending habits. 

See Mitch Tuchman, Debts That Can Kill Your Retirement Plan, Forbes, Apr. 11, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.