Virtually everyone wants to retire eventually. After all, you worked your entire adult life and want some time to relax, travel or pursue your passions. Still, unless you saved a considerable amount for retirement, you may find that you have more bills than financial resources. Fortunately, you probably do not have to let debt overshadow your post-work life.
Experts disagree about how much a person must save for retirement. Even if you go with modest projections, though, you need to have a substantial amount in your retirement accounts. If you are struggling to keep up with expenses, you have some options.
Rework your budget
Before taking other steps to address your financial situation during retirement, you should rework your budget. If you can cut back on expenses, you may save enough to meet all your monthly obligations. You may also be able to negotiate the amount you owe to creditors.
To create a working budget, list necessary expenses, such as housing, food and transportation costs. Then, determine how much you have left for other things. If you are lucky, you may be able to save enough through budgeting to make it to the end of your retirement without taking other actions.
Consider bankruptcy protection
Even if you have retirement savings and government benefits, you may simply have more bills than you can pay. This may be especially true if you have medical expenses that Medicare or private insurance do not cover. Either way, you may want to consider filing for bankruptcy protection. If you go this route, you have two options.
Filing for Chapter 13 bankruptcy allows you to keep your assets while restructuring your debts. That is, you come up with a repayment plan for your outstanding balances, committing to satisfying your debt in three to five years. If you want to do away with your debt during bankruptcy, Chapter 7 may be a better approach. This filing allows you to discharge your debts, even though you have to liquidate some assets.
You should not have to worry about finances during your golden years. If developing a budget does not improve your financial condition, you likely have some bankruptcy options. Regardless of the path you choose, taking early action may make the rest of your retirement significantly better.