Managing debt in retirement takes some planning

Seventy percent of U.S. households headed by people ages 65 to 74 had at least some debt in 2016, according to the Federal Reserve’s latest Survey of Consumer Finances. So did half of those 75 and older.

Paying debt usually gets more difficult on a fixed income. Mortgage debt, especially, can be a huge burden in retirement.

Here are three loans to consider: Refinance/recast your mortgage

For retirees determined to stay put, refinancing or “recasting” the loan can lower payments, said Serina Shyu, a certified financial planner in Atlanta. While refinancing requires taking out a new loan, with substantial fees, recasting means keeping the same loan, but using a lump sum to pay down the balance and lower the payments. Recasting is offered by some but not all lenders and may not be good idea if the lump sum would come from retirement accounts.

Consolidate your debt

People with good credit scores, and sufficient discipline, can use zero-percent balance transfer offers to consolidate and pay off their credit card debt. Those who need more time to pay off debt might consider a personal loan with a fixed interest rate and fixed payments.

Open home equity line of credit

HELOCS shouldn’t be used for frivolous spending, but they can be a good backup to an emergency fund. HELOCS also can fund home repairs or long-term care. — Liz Weston, Nerdwallet