Most people are worried about how the stock market will limit their ability to retire, but it’s even more likely that their debt load will be a bigger hindrance. Here’s why. Debt seriously affects how much money you will need to cover your expenses in retirement. The larger your debts are, the more you will need in pensions or savings to cover those payments – on top of your living expenses.

If you are at all concerned about how your debts will affect your retirement, you are faced with two choices. You can adjust your spending today, and redirect more of your cash flow toward “retiring your debts” — or you can plan to retire later yourself.

Target to be debt-free before retirement by setting a specific date to pay off each individual debt, one by one. If you want to retire in ten years, adjust your payments so that your mortgage, line of credit, credit cards, or car loans are paid off before those ten years are up. You can arrange to pay off debts like your mortgage more frequently than once a month which also speeds up repayment. Don’t count on making lump sum payments to pay off your debt before retirement – they simply might not happen. Adjusting your monthly payments, starting now, is much smarter and easier.

Coming up with a debt repayment schedule requires you to think more realistically about your retirement needs and then to make plans accordingly. (Think of it as your retirement training program.) Sure, you might have to make some difficult decisions today, but by taking action steps now you will feel more in control, confident and secure when it comes time to accept your proverbial gold watch. – Karin Mizgala

Karin Mizgala is a Vancouver-based fee-for-service financial planner with an MBA and a degree in psychology. She’s the co-founder of the Women’s Financial Learning Centre.