The Majority aims to do so, but less than 25% succeed

Retirement should be the moment you finally stop stressing about moneyright? Unfortunately, for most Americans, that is not the case. According to a study by the Boston College Center for Retirement Research, eight in 10 middle-income Baby Boomers are still facing some form of debt. In addition, nearly 30% of these retirees allocate more than 40% of their monthly income to debt payments.

Although more than half of Boomers plan to retire debt-free, the numbers tell a different story. A survey by the Employee Benefits Research Institute (EBRI) reveals that only 23% of retirees aged 65 to 74 achieve this goal. Among those 75 and older, the percentage is slightly better at 46%, but this also means that more than half of retirees in this age group carry some form of debt.

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A Growing Trend: Retirement Debt

Rising debt among retirees isn’t new — it’s been building for decades. For example:

• In 1989, only 58% of older households had debt. By 2016, that number had jumped to 71%.

• Households headed by individuals 65 and older saw their debt rise from 41.5% in 1992 to 60% in 2016.

• The percentage of those 75 and older with debt has grown from 21% in 1989 to 53% in 2022.

These numbers show a significant change in the way retirees manage their finances. While not all debt is “bad”—a manageable mortgage, for example—the prevalence of high-interest debt, such as credit cards, is a major concern.

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Why are pensioners still in debt?

So, what is driving this trend? Several key factors are at play:

• Rising Costs: Health, housing and basic living expenses have increasedleaving many retirees to rely on credit to make ends meet.

• Insufficient savings: Numerous studies have shown that many retirees do not have enough savings to support their desired lifestyle. The National Council on Aging reports that 80% of families with older adults are either in financial difficulty or at risk of falling into economic insecurity.

• Extended mortgages: Unlike previous generations, many retirees still have mortgages in their 70s and beyond, which adds significant financial strain.

The Story Continues