Let me show you how bankruptcy relief can help you secure your retirement, even if you have never invested a dime in your life. If you are struggling financially, why put a higher priority on the repayment of your debts than investment in your retirement? I don't know, but a lot of people make this mistake. Don't make the same mistake. It will cost you your retirement and you'll have nothing to show for it. Here's what I mean:
If you make minimum payments on credit card debt and have nothing saved for retirement, you may be a good candidate for bankruptcy. If you want to be self-sufficient and live a reasonably comfortable life in retirement, it will take significant savings over time to make that happen. Attention to retirement is extremely difficult if you are burdened by medical bills and credit card debt at high credit card interest rates.
Example: Assume that the credit card debt is $20,000, the interest rate is 18%, and the minimum payment is 2.5%. Which scenario makes more sense to you?
1) If you make the minimum payment and add nothing to the balance in the way of new purchases or penalty fees, it will take 37.5 years to pay the balance down to zero. Interest over the life of the repayment period would be nearly $30,000. What you have at the end of 37 years is nothing more than a paid off debt.
2) If, instead, you made the same payments required to pay off that credit card (approximately $50,000) into retirement savings at 6% for 37 years, you would have $315,874 in cash to fund your retirement. Which would you rather have after 37 years of making the same monthly payments: Nothing or $315,874? The older one becomes, the easier it is to give up on saving for retirement. It's normal to think the task of saving for retirement is too large, and the time remaining too small. However, every dollar saved is an investment for your cost of living in the future, and more money that you can leave your family.
Though the attempt to pay creditors all of the debt owed could be considered honorable by some people, the question is whether that is the best choice for you. Many would argue it is far more honorable to take care of one's self and family to secure future well-being and financial stability. Credit card companies don't have to retire, people do.
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