NEW YORK (MainStreet) — It's hard to believe, but according to a recent report by Forbes, 68% of Americans aren't saving for retirement in an employee-sponsored plan. What's more 69% of Americans under the age of 30 and a full third of those between 30 and 49 have nothing put away for retirement. If retirement is looming and you have nothing saved up, you don't have a lot of options. Still, you have a few things that you can do if you have even a decade left before your last day on the job.
Eliminate Your Consumer Debt
"We're seeing a lot of people going into retirement with significant amounts of debt," says Gerri Detweiler, Credit.coms Director of Consumer Education. She notes that the lower one's expenses are in retirement, the further that money can go. So even if you have very modest retirement savings, getting rid of your consumer debt while you're still working can turn that savings into something you might be able to live off of.
"If you find yourself facing retirement with quite a bit of debt, you should make an appointment with a credit counselor who can help you to get a plan for getting out of debt," Detweiler says. In this manner, it's possible to get on a debt management plan where you can pay off your debts in three to five years. "That can make the difference between going into retirement with no debt or having a bankruptcy looming," she says.
Kevin Gallegos, vice president of Phoenix Operations with the Freedom Financial Network, agrees. "It's kind of foolhardy to start saving when you have credit cards at 25% APR," he says. "You're losing money. You need to start by clearing off your debt."
Family financial expert Ellie Kay notes that this means you also need to be very careful when it comes to loaning money or taking on new debts. "This is the time to downgrade so that you can pay your mortgage," she says. She urges people to have most of their mortgage paid off as they enter retirement, if not completely paid off. After all, it's just one less expense to worry about when you're no longer working.