The Shocking Truth: Debt in Retirement is Nearly Universal
You worked hard your entire life. You saved, invested, and looked forward to a debt-free retirement. But here’s the harsh reality: 97.1% of retirement-age Americans carry some form of non-mortgage debt. That’s right—nearly EVERYONE is bringing debt into what should be their golden years.
RETIREES WITH NON-MORTGAGE DEBT
97.1%
Median debt: $11,349
The median non-mortgage debt for retirement-age Americans is $11,349. But that’s just the median—many owe significantly more. And this doesn’t even include mortgage debt, which many retirees still carry.
What Kind of Debt Are Retirees Carrying?
Let’s break down where this debt comes from. The numbers might surprise you:
| Debt Type | % of Total Debt | Why It’s a Problem |
|---|---|---|
| Auto Loans | 33.3% | Depreciating asset, high monthly payments |
| Credit Cards | 31.7% | High interest rates (18-25% APR typical) |
| Student Loans | 15.6% | Often for children/grandchildren |
| Personal Loans | 13.0% | Medical bills, emergencies |
| Other Debt | 6.4% | Store cards, payday loans, etc. |
Source: LendingTree Retirement Debt Analysis 2025
The Credit Card Crisis: A Dramatic Increase
Perhaps most alarming is the explosion in credit card debt among retirees. The percentage of retirees carrying credit card balances jumped from 40% in 2022 to 68% in 2024. That’s a 70% increase in just two years.
🚨 WARNING: Credit card interest rates averaging 20-25% can devastate a fixed retirement income. A $10,000 credit card balance at 22% APR costs $2,200 per year just in interest—money that could have gone toward living expenses or healthcare.
Why the dramatic increase? Several factors:
- Inflation: Rising costs of food, housing, and healthcare forcing retirees to use credit cards to bridge gaps
- Interest rate hikes: Federal Reserve rate increases making existing debt more expensive
- Healthcare emergencies: Unexpected medical bills not covered by Medicare
- Helping family members: Many retirees supporting adult children or grandchildren financially
Geographic Variations: Where Debt Hits Hardest
Retirement debt isn’t distributed evenly across the country. Some metro areas show particularly concerning patterns:
| Metro Area | Median Debt | Primary Driver |
|---|---|---|
| San Antonio, TX | $18,107 | Auto loans, credit cards |
| Jacksonville, FL | $17,811 | Healthcare, housing costs |
| Dallas, TX | $16,985 | Cost of living, auto loans |
| Phoenix, AZ | $15,432 | Rising housing, utilities |
| National Median | $11,349 | All categories |
Source: LendingTree Analysis 2025
Why Debt in Retirement is Especially Dangerous
Carrying debt during your working years is one thing. You have income, you can adjust, you can work overtime. But debt in retirement is a completely different beast:
The Retirement Debt Trap
- Fixed income: Your retirement income is largely fixed. You can’t easily earn more money to pay down debt.
- Compound effect: High-interest debt like credit cards compounds against you while your savings might not keep pace.
- Reduced quality of life: Money going to debt payments can’t go toward experiences, healthcare, or helping loved ones.
- Stress and health impacts: Financial stress in retirement has been linked to higher rates of depression, anxiety, and even physical health problems.
- Depletes savings faster: Using retirement savings to pay off debt means less time for compound growth and higher risk of running out of money.
Real-World Impact: What $11,349 in Debt Means
Let’s put this in perspective with a real example:
ANNUAL COST OF MEDIAN RETIREMENT DEBT
$2,270
Assuming 20% average interest rate
That’s $2,270 per year—or nearly $190 per month—going toward interest alone. For a retiree living on $2,500 per month from Social Security, that’s almost 8% of their entire income going to interest payments without reducing principal.
How to Escape the Debt Trap Before and During Retirement
Debt Elimination Strategy for Retirees
If You’re Still Working (5-10 Years from Retirement):
- Make debt elimination a priority NOW
- Use the debt avalanche method: Pay minimum on all debts, extra toward highest interest rate
- Consider balance transfers to 0% APR cards (but commit to paying off during promotional period)
- Avoid new debt at all costs
- Delay retirement if necessary
- Working 2-3 extra years can eliminate debt AND boost savings significantly
- Use extra income solely for debt reduction
- Delay Social Security to increase future payments
- Downsize early
- Sell larger home, eliminate mortgage and property taxes
- Use proceeds to pay off high-interest debt
- Move to lower cost area
If You’re Already Retired with Debt:
- Stop the bleeding first
- Cut up credit cards or freeze them in a block of ice
- Switch to cash-only or debit cards
- Create strict budget tracking every dollar
- Consider strategic use of retirement assets
- Calculate if paying off high-interest debt with IRA withdrawal makes sense
- Be aware of tax implications, but 20% credit card interest usually beats the tax hit
- Consult with tax advisor before withdrawing
- Explore income opportunities
- Part-time work or consulting in your field
- Gig economy opportunities (driving, delivery, etc.)
- Rent out room through Airbnb
- Monetize hobbies or skills
- Consider reverse mortgage carefully
- Can provide income to pay off high-interest debt
- Understand costs and implications
- Should be last resort after other options exhausted
- Negotiate with creditors
- Many creditors will reduce interest rates or principal if you’re on fixed income
- Credit counseling services can negotiate on your behalf
- Document income and expenses to show hardship
The Debt-Free Retirement Advantage
Imagine entering retirement with zero debt. Let’s compare two scenarios:
| Factor | With Debt | Debt-Free |
|---|---|---|
| Monthly Income | $2,500 | $2,500 |
| Debt Payments | -$400 | $0 |
| Available for Living | $2,100 | $2,500 |
| Annual Difference | $4,800 more per year debt-free! | |
Over a 25-year retirement, that’s $120,000 that could go toward healthcare, travel, helping family, or simply providing peace of mind.
The Bottom Line
With 97% of retirees carrying debt, you might think it’s “normal” or unavoidable. It’s not. Debt in retirement is a choice—and the wrong one.
Your Goal: Enter retirement with zero non-mortgage debt. If you have a mortgage, have a plan to pay it off within 10 years of retirement or consider downsizing.
Are you carrying debt into retirement? What’s your strategy for becoming debt-free? Share your plan in the comments below.
About the Author: Robert Chen is a Retirement Finance Analyst at RetireMetric.com, specializing in debt management strategies and retirement financial security.
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