However, according to a 2026 BHG Financial survey, 15 percent of respondents said they will carry credit card debt for the rest of their lives, while nearly 46 percent said their current debt negatively affects their mental health. So, what does that mean for retirees entering their second act without a clean financial slate? Keep reading to see what the expert I spoke with had to say about retiring with debt.
Retiring with debt is more common than you might think (or hope), according to D.W. Darling, PhD, Certified Financial Therapist™, Licensed Psychologist, Assistant Professor of Psychology at Southern Utah University. Federal Reserve data that was analyzed by MarketWatch found that nearly 65% of Americans aged 65 to 74 held debt in 2022, with an average balance of $134,950. Among those 75 and older, about half held debt, with an average balance of $94,620.
Related: The Hidden $124k Financial Threat to Your Retirement That Nobody Is Talking About
Is Carrying Debt Into Retirement Ever a Good Thing
However, when it comes to the perks of carrying debt into retirement (like a mortgage that can offer some tax advantages), Darling says you'll want to consult with a professional to see if the pros outweigh the cons.
Structured and predictable Low-interestTied to assets you actually use
Meanwhile, the "worst" kind of debt, she says, you can carry into retirement would include:
High-interestVariable-rateNot attached to an underlying assetDebt that creates an "emotional load"Carrying Credit Card Debt Into Retirement Does Not Equal Failure
That "emotional load" comment from Darling is likely the most important takeaway here, since so many of us (myself included) tend to associate debt with failure. But the reality is that debt is just another way to leverage your assets to get the things you want and need. "I see clients treat it as evidence they did something wrong, and that narrative does more damage than the debt balance itself," Darling says.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
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