Paying down your debt is saving for retirement, says Jay Zigmont of Childfree Wealth

December 22, 2022

Paying down debt, along with building money management skills, are key steps in the process of getting ready for retirement, says Jay Zigmont, PhD, CFP®, who is the founder of Mississippi-based Childfree Wealth.

Save with SPP was able to connect with him by e-mail recently for his views on these topics.

Do people understand the need to pay down credit cards, lines of credit, loans and other non-house debt before they retire? (Thinking here about the difficulty of retiring WITH debt)

While I recommend being debt free when you retire, it is often one of the more controversial topics.  You should make getting out of debt a priority.  Paying off your consumer debt will most likely give a better tax-free return than investing.  Once your consumer debt (credit cards, loans) are paid off, your goal should be to pay off your house before retiring.  With all of your debts paid off, your retirement expenses can be controlled and should be a lot less.  When you enter retirement, you are on a fixed income, so keeping your expenses low may be the key to success. 

What’s the most important financial planning step that folks can take to turn around their (lack) of money management skills?

Learn how to manage your money.  The only thing I was taught growing up was how to balance a chequebook, which is a complete waste of time now.  You can choose at any time in your life to learn how to manage your money.  You can learn on your own, or by working with a financial planner.  Either way, your goal should be to understand your own money behaviours and how to get the most out of your money. 

Is it ever too late to start saving for retirement – what are your views on the importance of setting aside money for the future?

Saving for retirement is more than just putting money into accounts and investing it.  Paying down your debt is saving for retirement.  Learning how to live on a budget is a skill for retirement.  Your age is not what determines your ability to retire, your net worth and money behaviours are what matters.  No matter where you are in life, you can always learn more and save more. 

What’s the one thing that surprised you the most about people and money?

What surprises me most about money is how people compare to others and try to apply rules of thumb that do not fit them into their life.  For example, I work with Childfree and Permanently Childless people.  Most (if not all) general financial advice assumes that you either have kids or will have kids.  For Childfree people, who don’t have kids and aren’t planning on having kids, these guides just don’t fit well.  The key is not to compare yourself to others or benchmarks, but to compare your progress toward your goals year over year.  Your life and your money are your own, stop comparing against others. 

Childfree Wealth, notes Zigmont, is a Life and Financial Planning Firm based in Mississippi. He is a Fee-Only, Advice-Only, Fiduciary, Certified Financial Planner™, Childfree Wealth Specialist, and author of the book Portraits of Childfree Wealth.  His PhD is in Adult Learning from the University of Connecticut, and he specializes in helping Childfree and Permanently Childless people to learn how to manage their money.  

We thank Jay Zigmont for taking the time to answer our questions.

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Childfree Wealth, Jay Zigmont

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