What boomers are getting so wrong about retirement

Listen up, my 60-something friends (and those of you heading to that milestone soon) we need to have a talk about your retirement planning.

I know from my many conversations with you that you have worked hard to save more. Great. And I know many of you are now aware that delaying when you start to take Social Security to age 70 (at least for the higher earning spouse) is a fantastic way to boost your retirement income. Great again.

But where so many of you trip up is that you are heading into retirement still in debt. A recent report from TransUnion found that nearly one in three Americans at least 60 years old has debt and the average balance is more than $60,000. That's up sharply from 2005 when 22 percent of the 60+ crowd had debt and the average balance was $40,000. That $40,000 adjusted for inflation would still be less than $49,000 in today's dollars, so the sad fact is that older Americans are indeed living with more debt as they reach retirement.

Baby Boomers retirement
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I can't stress this enough:Paying off all your debts before you retire is the ticket to a more secure retirement. Your bills will be lower, which is what you want when you are going to be living on a fixed income. Besides, there's the emotional benefit. If your living costs are lower—because the mortgage and home equity loan are paid off and you don't have credit card debt nagging at your conscience—your stress level is going to be lower. And isn't that what you deserve in retirement?

So how do you come up with the money to get out of debt? Well, for starters, look at your current living expenses. (You can use my free ExpenseTracker.) I challenge you to separate needs from wants and then tell me you can't find at least $250 a month in reduced spending that could go toward debt reduction. And I said at least. I bet you can find more.

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If you intend to live in your current home once you retire, I really want you to put some elbow grease into getting the mortgage paid off no later than when you retire. If you are contributing more to a 401(k) than what is needed to earn the maximum matching contribution, scale back your contributions. And use the extra money in your paycheck to pay down your mortgage.

I want to be clear: you are only to contemplate this if you can honestly say that you can afford to stay in that house. I know you want to stay in the house. But please be realistic. Even if you are mortgage-free, there will always be insurance, property taxes and maintenance. If the cost of those expenses is going to be too much, the best retirement planning move you can make today is to start thinking about where and when you will downsize. It may be to a smaller home in your neighborhood, or perhaps an entirely different state, where you can live easily by living debt-free.

See more of Suze Orman's advice on The Suze Orman Show Saturdays on CNBC at 9 p.m. ET.