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Whether your retirement seems decades away or just around the corner, it is something we have dreamed about at one point in our lives.

Have you had the daydream where you give that final notice and within weeks are on a plane to somewhere tropical to start your vacation for the rest of your life?

Also known as the "golden years," retirement might not seem so golden if you find yourself with a mortgage to pay off, medical insurance, auto loans, country club expenses and the cost of living.

Typically, retirement means that you will need less money since your professionally expenses (lunch, clothing, parking, gas, etc.) are now eliminated. However you need to consider that there are other expenses that just might take their place.

It has been estimated that the average American is going to require around 70% of their income earned (in the peak years) for their retirement fund. So let's say you were making $50,000 a year, now you are going to need about $35,000 in retirement to survive. This may seem like a lot, but take a few things into consideration.

Your medical expenses are going to be higher now because you are older. Now that you are not working, your insurance from your employer is gone. So lets look at a family (of two for example) might have a co-pay of $10 to $20, well their monthly medical expenses could be up to $1000.

Think about all the free time that comes with retirement. You know that has made its way into your dreams, heading out for a 10am tee time or brunch with the girls. The leisure expenses can add up as well.
While working, your monthly expenses probably include a mortgage, insurance, automobile payment and insurance, utilities, food and credit cards.

Some of these expenses will carry over into your retirement. Think insurance, utilities and food, things that you pretty much need to live. Now there are expenses that you can pay off and live without, like the credit cards, mortgage and auto loans. This should be your main priority to focus on before retirement so you can start off debt free.

Credit cards are probably your worst enemy. Start there and get it out of your life. You absolutely do not want to enter retirement with credit card debt and if you do, work now to minimize that debt. Managing your debt has become a huge problem for Americans. Approximately 30 million Americans are struggling with bad credit and that is usually due from credit cards.

Take the time now to analyze your debts. Come up with a plan to get out of debt and pay off all of your credit cards. You will be happy you did.

If you still have an automobile loan or loans, try to get it paid off before retirement. Next to credit card debt, you really don't want to have a car payment at this point in life. Of course you need a car (think of all that free time that comes with retirement) just make sure to come up with another plan to pay off that car in full as well.

Now for the biggest expense in your life, the mortgage. Of course you need a place to live. That is unavoidable. If you start now, and make extra mortgage payments every year then you will be working to get rid of it. Let's say you are paying $1000 a month, at the end of the year send them an extra $1000. Or you could break that up into smaller payments each month.

If you have a 30 year loan this method can reduce your mortgage term down to 23 years. Once you have paid the mortgage off that will eliminate your biggest expense, and in the future if you absolutely have to, you can take out a reverse mortgage.

Just remember that a lot of parents will start saving for their kids education before getting out of debt. Keep in mind that your children actually have a stronger earning potential than you do! Your ability to work in this fast-paced, quickly changing world with a high paying job is not as likely as your children.

Also, a good credit rating at this point is really important because you want to be able to use that towards any credit application in the event of emergencies. Getting rid of your debts before retirement will guarantee that you are in good standing.

Debt relief is available for those who need it. If you want to settle your debts before entering into retirement, there are companies who can help. They can negotiate on your behalf and before you know it, you will be on your way to financial freedom. After that, you will be living in retirement, not only stress-free, but debt-free as well.