Written by: Eric Bank
Edited by: Lillian Guevara-Castro
Reviewed by: Adam West
Key Takeaways
- Most older Americans are burdened with debt. Almost 3 out of 4 respondents over 55 are in debt of some kind, mainly credit and medical bills.
- High-interest payments and low incomes are significant impediments. Almost half of respondents say that they don't earn enough to pay their debts, and 30% listed high interest as an impediment.
- Debt puts retirement on hold for many people. Over 1 in 4 stated debt has pushed back their retirement, and some say they’re unsure if they'll ever become financially independent enough to retire.
Debt doesn’t vanish with age. For millions of older Americans, it’s the primary reason why they continue working — or why they’ve lost hope of retiring anytime soon.
A recent survey conducted by Talker Research and National Debt Relief shows a disturbing picture of life after 55 for many who carry debt. It polled 1,000 Gen Xers and 1,000 baby boomers on their debt accumulations, and what it discovered ought to concern anyone approaching retirement with outstanding bills in hand.
As it turns out, most survey respondents in this cohort are drowning in debt. Many said they are just keeping their heads above water, but some are going under.
A large number report having put their retirement on indefinite hold, not because they enjoy working so much, but because they can’t afford to stop working.
Debt Becomes the Standard, Not the Exception
Seventy-two percent of respondents aged over 55 are in debt, and for many of them, it feels like a collar around their neck. More than half of those who responded indicated debt has “held them back” in life — preventing them from purchasing homes, going on vacation, retiring, and so forth.
The major offender for 45% of those surveyed was credit card debt. The typical indebted person has a balance of almost $9,000 on plastic alone, with payments of about $418 each month.
Medical debt also enters into this painful picture, with 17% of people surveyed reporting they are burdened with almost $9,150 in medical bills.
These are not statistics. They are human beings who have to delay doctor’s appointments, disregard their own health, or continue working far beyond the age when they had anticipated slowing down.
National Debt Relief’s Chief Compliance and Consumer Affairs Officer Natalia Brown identified the essence of the situation: “Our findings reveal the nation’s consumer debt epidemic is impacting millions of older Americans’ financial futures and threatening to put the retirement they’ve worked toward for decades out of reach.”
Why People Can’t Get Ahead
And so, what’s keeping people from paying down debt? Low incomes and high interest are what it’s all about, according to the report.
Nearly half of those polled simply stated that they don’t make enough money to put a meaningful dent in debt obligations. The remaining 30% attributed it to interest rates so exorbitant that each payment becomes a case of spinning their wheels without going anywhere.
Some stated they couldn’t even manage to make minimum payments each month, so balances increase rather than decrease. Others said they had to choose between paying debt and paying essentials such as rent and food.
And the stress is real. About 34% of those who responded to the survey said they don’t believe they’ll ever be debt-free. That’s one-third of a sample of older Americans giving up hope of ever breaking free from the debt cycle.
For a great many, this isn’t just a financial issue — it’s also an emotional one.
Retirement Plans on Hold
Retirement was once the light at the end of the tunnel. Nowadays, for many older Americans, that light is dimming. The survey revealed that more than 1 in 4 respondents over 55 have delayed retirement due to debt. Some said they fear they will never be able to retire.
And this is the dilemma: While 64% said that debt freedom was more of a priority than retirement, they still can’t make progress toward either goal.
“Our findings reveal the nation’s consumer debt epidemic is impacting millions of older Americans’ financial futures and threatening to put the retirement they’ve worked toward for decades out of reach.” —Natalia Brown, Chief Compliance and Consumer Affairs Officer for National Debt Relief
For those with subprime credit, it can be even more difficult. Lower credit scores generally entail higher interest charges and fewer opportunities to refinance, setting up a difficult-to-break pattern of borrowing and repaying.
What Consumers Can Do
Those who find themselves in this situation are not alone — and there are actions they can take:
- Speak with a nonprofit credit counselor. They can assist with creating a budget, ranking debts, and avoiding expensive mistakes.
- Explore debt relief solutions. The sponsor of the study, National Debt Relief, provides structured programs to lower consumer debt loads.
- Prioritize paying off high-interest debt first. Eliminating high-interest credit cards can liberate more cash more quickly than paying off low-interest loans.
Even if retirement seems far away, every stride toward debt freedom counts. And although the way forward appears long, consumers don’t need to tread it by themselves.
