How to Pay Off Debt While Saving for Retirement
Paying off debt while saving for retirement may seem like a daunting task, but with the right strategies in place, it is achievable. The key is to find the right balance between reducing your debt burden and building up your retirement savings, while minimizing financial stress.
Tips for Paying off Debt and Saving for Retirement
High-Interest Debts First
One effective approach to tackling this dual financial goal is to prioritize your debts based on interest rates. Paying off these debts first will help you incur less interest. Therefore, by focusing on high-interest debts first, you can save money in the long run and accelerate your debt payment journey.
Budget Wisely
Another key aspect is budgeting wisely. Creating a detailed budget that outlines your income, expenses, debt payments, and retirement savings can help you identify areas where you can cut back or reallocate funds to meet both objectives. Setting up automatic transfers to contribute to your retirement savings and to pay down your debts will ensure that a portion of your income is going towards each of these goals.
Utilize Retirement Match Programs
Many larger companies offer RRSP matching programs, whereby they match all or up to a certain percentage of your contribution. This is a great tool to help save for your retirement, allowing you to put more focus on paying off your debts.
Increase Your Income
Lastly, explore opportunities to increase your income by having multiple streams of income. This can be through side hustles, freelance work, or investing, among other things. Any extra money earned can be put towards paying off your debt or added to your retirement savings.
Generate Cash Flow with Bloom
Remember that finding a balance between paying off debt and saving for retirement requires discipline and commitment. It may take time, but with persistence and smart financial planning, you can work towards being debt-free while building a secure financial future for your retirement years.
If you are looking for additional income to help pay off your debts and/or increase your retirement savings, our team at Bloom can help. Our customized dividend-paying investment portfolios can help you generate an additional stream of income that can be used to pay off your debts, be saved as cash flow to use during retirement or be reinvested and continue to grow. For more information, call us today at +1–416–861–9941 or email us at info@bloominvestmentcounsel.com
This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.