Stories by Omodele Adigun
Wondering how you’ll ever be able to retire with your current retirement savings nest egg? Make a plan to retire debt free. When you retire with fewer expenses, you may find that retirement is more affordable — and feasible — than you think.
An online platform, www. discover.com, itemises some steps to make one retire debt free. These include ‘keep your housing costs low; consider shorter-term loans, eliminate credit debt as soon as possible.; Never co-sign; Set tangible goals and Resist lifestyle inflation.
Here are the six simple steps you can take now in order to retire debt free.
Keep your housing costs low
Whether you opt to own your home or rent, Credit.com advises that you keep monthly housing expenses (which includes the cost of rent/mortgage payment, plus insurance and applicable taxes) to no more than 28 per cent of your monthly income.
While managing your housing expenses may take some sacrifice, particularly if you live in an expensive area, the premise is simple: The lower your housing costs relative to your income, the more cash you’ll have to pay down and avoid debt, invest, save and contribute to your retirement account(s).
Consider shorter-term loans
When your goal is to retire debt free, financing major purchases like a home or a car with a shorter term loan (like a 36-month car loan, or a 15-year mortgage) can help you stay honest about what you can truly afford, while reducing how much you have to pay to borrow, and for how long.
Though advisors explain that shorter loan terms require the financial discipline and confidence to take on a more significant monthly payment, shorter term loans usually have lower interest rates than their longer term counterparts.
Once the loan is paid off and you no longer have a monthly payment, you’ll have additional cash flow, and will own a valuable asset outright.
If your name is listed on any credit account or loan as an official co-signer , it’s legally considered your debt — even if you didn’t make the purchases required to create it. If the person for whom you co-signed doesn’t pay the debt as agreed, it could become your responsibility. If you want to retire debt free, don’t put your name on any debt you don’t have complete ownership over.
Set tangible goals
You may know you want to retire debt free. But how exactly will you get there? For example, consider: How much debt you have now; how much you can afford to pay toward the debt each month; how many months you’ll need to pay on the debt, until it’s paid in full and how you will track your progress
Form an action plan for how much you’ll need to save in order to slowly pay down debts each month. Identify what sacrifices you may need to make to get in the habit of paying debt consistently, along with new habits (like automatic bill payments) that can make it easier to work toward (and stick to) your goals.
Resist lifestyle inflation
As you become debt free, you’ll have more spendable income. Ironically, that can reduce the pressure to budget carefully, and cause you to spend more freely than you did when had less cash. But the goal to retire debt free isn’t just about paying off debt; it requires staying out of it.
As you pay down debt, give your new-found cash flow a new purpose in your budget, including investing, saving and increasing retirement contributions, so you’re not tempted to spend more, just because you can technically afford it.
GTBank launches subsidised package for military
Guaranty Trust Bank plc has launched GTPATRIOT, a unique salary account package which offers Nigeria’s servicemen and servicewomen subsidized banking products and dedicated value added services.
A statement from the bank says account allows serving members of the Military and Paramilitary institutions to open accounts with zero minimum balance while offering reduced current account maintenance fees and access to loans at reduced interest rates.
GTBank has been at the forefront of providing innovative account packages designed for the unique needs of various segments of the society. Among these account packages are the GTCrea8 e-Savers account which offers young people, especially undergraduates, benefits beyond banking, such as scholarships and career master classes, and the GTBank Seniors Account, which offers senior citizens of 65 years and above free banking services.
‘With the introduction of the GTPatriot Account, the bank will expand and deepen its relationship with another core segment of the society in line with its goal of enriching the lives of all customers and the communities in which it operates’, the statement adds.
Commenting on the GTPatriot Account, the Managing Director of the bank, Mr Segun Agbaje, said, “As an institution that deeply believes in service, we are excited to introduce this premium account that recognizes, applauds and appreciates the invaluable service that members of military and paramilitary institutions offer to the nation. The GTPatriot Account Package goes beyond providing best in-class banking products to servicemen and women, it includes a wide range of value added benefits that guarantees a superior banking experience and genuinely enriches their lives.
“We will continue to create innovative and specially targeted products and services in order to ensure long-term value adding relationships with several segments of our customers and the communities in which we operate.”
Guaranty Trust Bank plc has always been at the forefront of industry innovations within the Nigerian financial services sector and plays a leading role in Africa’s banking industry.