Financial dilemmas seem to grow with age

As a thirtysomething who writes and edits articles about business and finance every day, I used to hope money issues would be easier for me to handle in the future than they are now.

I assumed I would benefit from reading about such things. If not, I figured everyday experience would give me wisdom that would lead to smooth sailing in my financial future.

But today's question has reminded me that, in reality, financial issues often get more complex as we near retirement age.

The question was sent in by a reader who wishes to remain anonymous. She wrote that she and her husband will turn 59 and 60 years old, respectively, this year. They owe $73,000 at 5.25 percent on their first mortgage and will be paying on it for about 11 more years. They also owe $53,000 on a second mortgage with a variable interest rate that is now at 8.25 percent.

Furthermore, they have about $75,000 in credit card debt, with the highest interest rate at 6.9 percent, and figure they could eliminate it in about five years under their current payment plan.

"If we combine all together into one payment and pay what we are currently paying on all loans it will take approximately nine years and six months according to calculations, but I could be wrong," she wrote. "Should we refinance all outstanding debts together into one loan for 15 years at approximately 6.2 percent? Or should we combine the first and second mortgage together and refinance just that portion of our debt?

"Or should we leave all loans as they currently stand and pay off credit cards, then apply that portion of our money to the second mortgage, and leave (the) first mortgage in place? ... We want to do whatever will be the best to pay off all debt the fastest with saving us the most money on interest."

All worthy goals. For some guidance on how this reader can reach them, I contacted Ray LeVitre, certified financial planner in Salt Lake City and author of "The Retiring Boomer's Financial Handbook."

In short, Ray recommends that our reader consolidate her debt into one loan.

Under the current scenario, Ray wrote in an e-mailed response, our reader would pay $23,251 in interest over the 11 years remaining on her first mortgage. She also would pay $27,808 in interest on her second mortgage over an 11-year period, and $13,893 in interest on her credit card debt if she paid it off in five years.

So, considering her current monthly payments of $2,631, our reader would pay a total of $64,952 in interest as things stand now.