Think Your Credit Score Doesn’t Matter in Retirement? Think Again.

credit score

You have battled with your credit score your whole life. You wanted a good score so that you can could get the best loans, especially for your home mortgage. Finally, you’ve reached retirement, and you have it in mind that you can rest easy. You have your mortgage, you are done taking out loans for education, so you don’t have to think about your credit score any more right? Wrong. Your credit score still maters in retirement.

You Need to Watch Your Money Carefully in Retirement

Unless you happen to retire with extreme wealth at your disposal, you need to be frugal after retirement. You need to budget. After all, you don’t have the kind of income coming in that you once did. You aren’t going to get raises and other windfalls. You have to make do with what you have.

Therefore, it’s really important that you watch your money carefully. If you have bad credit, then you put yourself at risk. What if something happens and you need to refinance your home? Or what if you need to take out an emergency loan? So many things can go awry in life. Medical expenses, natural disasters, the needs of adult children … you just might need to get credit or a loan again even after you’ve retired.

If you don’t have good credit, then you’re going to end up with a loan that has terrible terms (if you can get a loan at all). A bad credit score means you’ll have a higher interest rate, which in turns means that you’ll have higher monthly repayment bills. If you’re trying to budget in retirement then you can’t afford to waste money on those exorbitant fees. If you maintain a good credit score in retirement then you don’t have to worry about that so much.

You Probably Have More Bills in Retirement Than You Anticipated

People like to paint a rosy picture of retirement. You’ve worked hard your entire life, so now you can rest. You can take the money that you set aside and enjoy your sunset years. However, this financially lovely picture simply isn’t the reality for many Americans reaching retirement age today.

Baby boomers who have retired or about to retire have much higher bills than they might have expected. In fact, many still owe on their homes, either due to an original mortgage or to refinancing over the years. Additionally, older people increasingly have high levels of credit card debt to their names. Some people even still have student loan debt when they retire!

If you have these types of outstanding debt, then you really need to make sure that you have a good credit score in retirement. You should work to improve the score as much as possible. You can do that through debt repayment, increased credit lines, disputing incorrect credit report information, etc. Once you have boosted your score as much as possible, you can then use that good credit score to get a great rate on a consolidation loan. This will allow you to repay that debt as quickly as possible so that it doesn’t hang over you throughout your entire retirement.

Plus more and more Americans retire but then start a post-retirement business of their own. If you’d like to start a new business, then you might need a business loan. If you have a good credit score in retirement, it’ll be significantly easier to get that loan.

Read More:

Best Places to Retire Depending On Who You Are

best places to retire

I’ve been looking at some recent lists of the best places to retire. They aren’t bad options. However, I think retirement locations really depend on the individual. No matter how cost-friendly it is, a place isn’t the right place if you don’t love it. After all, you’ve worked your whole life to reach retirement; you should definitely love where you live in those later years! Luckily, the lists do tend to reflect a variety of options for people with different lifestyles.

Retiring on the West Coast Requires Money

Forbes recently came out with their 2019 annual list of the 25 best places to retire. They specifically note that you’re not going to find many options in the Northeast or anywhere on the West Coast. That’s because affordability is one of the main factors that they take into consideration when ranking this list. Yes, the West Coast can be very expensive. If you want to retire in a place like the San Francisco Bay Area then you need to have a decent amount of money in the bank.

That said, I love San Francisco. I love living here. In fact, I really don’t want to live anywhere else. Will I be able to retire in San Francisco? I don’t know. I’m working towards it. But even if I can’t, chances are that I’ll want to stay somewhere on the West Coast. It’s the way of life that I prefer, even if I have to sacrifice financially in other ways to make it happens. Therefore, these lists of the best places to retire often exclude the very places I want to live.

Variety in Options of Best Places to Retire

Although the list excludes much of the West Coast, it does offer a lot of variety in other ways. The 25 cities they claim are the best places to retire range in population from 8000 (Brevard, North Carolina) to 1.5 million (San Antonio, Texas). While that excludes the largest cities in the US, it does offer a decent range for people to choose from. There’s also a range in median home price from $135,000 (Savannah, Georgia) to $297,000 (Wenatchee, Washington). That’s not a huge range but it reflects the opportunity to choose from different living styles. Whereas most cities listed are in warm locations, there are a few cities for those who think the best places to retire have many months of snow.

US News offers even more variety in their report. They include 100 best places to retire. These are generally larger cities than those on the Forbes list. Population ranges from 500,000 in Santa Rosa, CA (a West Coast option!) to the many millions of New York City (which actually ranks #16 on this list of best places to retire.) The difference between these two lists really highlights that people seek many different things when it comes to retirement and therefore it’s not easy to rank cities this way at all.

You Don’t Have to Retire in the US

Of course, these lists all offer options in the United States. However, you don’t have to retire in the US at all. If you’re adventurous, have family elsewhere, or just want to spend your later years somewhere new, then you might consider retiring abroad. US News has listed the ten best places to retire in Latin America, and many of the cities on that list hold broad appeal. So, if you’re looking towards retirement, don’t just rely on lists or what others have to say. Really think about who you are, what you want, and what’s realistic for you in your later years.

Read More: