A POST FROM WESLEY B. OWENS - FINANCE GUY

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DAILY FINANCIAL TIP: HOW DOES CREDIT AFFECT RETIREMENT

Saving for retirement is important at all ages. However, most individuals begin to undertake serious money management responsibilities around age 30. This is a critical period in financial planning, as spending and savings habits help to set the financial foundation for the retirement years. In this article, we review one of the financial habits that can affect your ability to save for retirement-Credit and Credit Rating
While using credit may not be seen as saving for retirement, it does impact an individual's ability to contribute to a retirement account and/or to take other steps toward a financially secured retirement. Improper use or abuse of credit can limit an individual's ability to save and may result in a higher cost of living than that which would apply to someone with good credit.

In general, having a good credit history, or credit rating, means that you pay your bills on time, do not exceed the credit limit on your credit accounts (such as credit cards) and your debt to income ratio (DTI) is low. A good credit history provides the basis for negotiating interest rates on loans and can result in significant savings on interest paid over time. These savings can increase a person's amount of disposable income and, therefore, the amounts available to save in a retirement account.