If it looks like you’ll retire with some debt, factor that repayment into your overall plan, said certified financial planner Lynn Ballou, regional director of EP Wealth Advisors in Lafayette, California.
“Make sure the payoff of those debts is built into the budget — not as an additional cost, but because you are giving something up,” she said.
Your retirement plan should also include a cash “thinking fund” to save for anticipated big-ticket purchases or expenses in retirement, Ballou said. That way, you don’t have to pull extra out of a retirement account (triggering tax surprises) or take on substantial new debt.
“People forget if they retire at 65, they’ll probably buy a car or two, and replace their roof at least once,” she said.
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