Most Americans today are not saving enough for retirement and many are bringing burdensome student loan debt with them into their golden years. Your retirement should be a time of relaxation and time well-spent with your grandchildren. Understanding the risks associated with bringing student loan debt into retirement can help you avoid making the common mistakes many retirees have already made.
In a recent study by LIMRA Secure Retirement Institute, retirees are incurring unprecedented levels of student loan debt. The research revealed that 26 years ago, student loan debt among retirees was less than 1%. As of 2013, the figure has risen to a total of 15% and the average amount is more than $2,300. This new data suggests that parents and grandparents are taking out loans and co-signing for their children and grandchildren’s college and graduate school education.
Retirees with very high levels of student loan debt are at risk of having their Social Security payments garnished, if they default on federal student loans. The best defense against student loans is to refrain from taking out more than needed. Research all of your options, such as federal aid, scholarships, grants and work-study income before taking out a loan for your child or grandchild. Do not be tempted to pay off student loans with saved money from your 401(k) or IRA. These important funds are for when you retire and you will be penalized for taking money out early.
For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Source: http://www.cbsnews.com/news/retirement-plans-increasingly-hampered-by-student-loan-debt/