fbpx
Skip to main content
Created: November 29, 2024
Modified: November 26, 2024

Podcast Episode 385: Is It Okay to Carry Debt in Retirement?

What You’ll Learn:
Managing your money in retirement is much simpler when you don’t have to debt to account for, but there are times when debt isn’t necessarily a bad thing.

Managing your money in retirement is much simpler when you don’t have to debt to account for, but there are times when debt isn’t necessarily a bad thing. In this week’s Money Wisdom question series, Jake Doser, CFP®, CPWA® and Nicholas J. Colantuono, CFP® tackle a listener’s question about whether it’s wise to carry debt into retirement. This discussion addresses the pros and cons of carrying debt into retirement, particularly focusing on mortgages and home equity lines.

It’s not uncommon to have conversations with clients about the merits of being debt-free versus maintaining low-interest debt like mortgages and home equity lines. Not all debt is created equal and understanding the difference between good and bad debt is crucial. Good debt, such as low-interest mortgages, can be a strategic financial tool, while bad debt, like high-interest credit card balances, can be detrimental to your financial health.

Like much of financial planning, it often comes down to math. Interest rates play a big part in determining the quality of debt. You have to weigh opportunity costs and how the money tied up in debt could potentially work harder for you elsewhere. Interest rates can impact your financial strategy, especially in retirement, so make sure that’s one of your considerations.

Cash flow management is another vital topic covered in this episode. Managing your cash flow effectively can help you maintain financial stability in retirement. But be careful about becoming “house rich and cash poor,” where all your assets are tied up in your home, leaving you with limited liquidity for unexpected expenses.

No matter where you are in your retirement planning journey, the “Are You Ready to Retire” Starter Kit can be a very helpful tool. Get access to it by texting KIT to 800-757-0436, and make sure you tune in to the Money Wisdom podcast to gain a deeper understanding of debt management to help ensure you’re on the right path to a secure and fulfilling retirement.

Here’s what we discuss in this episode:

0:00 – Intro

1:19 – Today’s question on debt

1:46 – Good debt vs bad debt

3:11 – Threshold for good debt

6:30 – Debt in retirement

Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.

Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.

Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.

Resources by Topic

Subscribe to Our YouTube Channel

Share

Related Resources

  • What to Consider Before Moving in Retirement

    If you have the liberty to relocate in retirement, does that mean you should? Maybe you’re a snowbird who wants to live down South full-time, or maybe you want to stick it out in the cold and spen…
  • Dodging the Tax Torpedo

    When envisioning the next chapter of your life, the impact of taxes can often be overlooked or forgotten altogether. The reality is, without the proper planning, you may be at the mercy of an impe…
  • How Can You Understand and Improve Your Credit Score?

    In retirement, your credit score is still relevant in achieving and maintaining financial independence. The question is, how can you best understand and improve your score to reap the benefits of …
  • RMDs and You

    Tax-deferred retirement accounts like IRAs and 401(k)s have allowed your savings to grow without any immediate tax burden. However, once you reach a certain age, the IRS requires you to begin maki…
  • How to Financially Plan for a New Presidential Administration

    A new presidential administration is set to take office next year, and while there are a lot of uncertainties around what a second Trump term could bring, it’s important to stay the course in your…
  • Magic Retirement Number

    Do you know your magic retirement number? This is the amount of money you need to retire – and it’s different for everyone. Let’s explore how to calculate your number, how it compares to the rest …
  • Should I Consolidate My Multiple 401(k) Accounts?

    If you’ve contributed to multiple 401(k) or other employer sponsored plans over the years, you may be wondering about today’s question, is it time to roll your old accounts into an IRA? In this we…
  • Social Security Review: How to Get it Right

    Social Security may be just one piece of the puzzle, but the decisions you make about when and how to claim your benefits can be crucial to the stability and strength of your overarching retiremen…
  • When Should I Consider Borrowing Against My Assets?

    Welcome back to the Money Wisdom Question Series. Today’s question is, when would it be beneficial to borrow against my assets? While there are ways to borrow against assets such as a vehicle, we’…
  • Reaching the Retirement Mountain

    The journey to and through retirement is like climbing a mountain. Climbers must diligently prepare for every aspect of their voyage – the climb up, reaching the top, and coming back down. You wan…
    Back to top
    Our Locations
    Johnson Brunetti
    Welcome to Our New Website!
    Everything was designed with you in mind, making our retirement planning resources more easily accessible to you.
    Check out your new resource center, where everything can be organized by article type or topic
    Are you ready to speak with a financial advisor?
    Skip to content