I’m Retired and I Regret Not Being Debt-Free — Here’s Why
Written by
Martin Dasko
Edited by
Molly Sullivan
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According to the Federal Reserve’s Survey of Consumer Finances, the median balance for a retirement savings account is around $87,000. With American household debt reaching a total of $17.69 trillion as of the first quarter of 2024, per Federal Reserve data, it’s clear that consumers of all ages are struggling.
With the average retiree receiving about $1,915 monthly from Social Security, the idea of retiring with debt is frightening, especially since expenses have increased over the last few years. Here’s why one retiree* regrets not being debt-free when they left the workforce.
Also, here are some myths about debt that you should be aware of now.
Couldn’t Enjoy Retirement as Hoped
For the retiree who went into retirement with debt, those debts ate into their retirement income, which limited their options for entertainment and what they could do with their free time, including taking trips and vacations. Those debt payments made it difficult to plan travel since the retiree had to worry about covering their payments before they could consider any other expenses.
When you have credit card debt or mortgage debt, you have to dedicate a significant amount of your retirement income to making these payments. After working hard your entire life, you’ll likely want to enjoy some new experiences instead of being stuck at home.
Constantly Stressed About Paying Bills
The debt led to constant anxiety over how they would handle increased expenses or possible emergencies. This type of stress is not something you should have once you retire especially since, as a retiree, you’re on a fixed income, making it challenging to deal with unexpected or unplanned expenses.
You don’t have the flexibility in your budget or the ability to pick up extra shifts at work to earn money to cover these costs.
Forced To Return To Work
The struggle to keep up with paying bills and the need for extra income forced the retiree back into the workforce. The job that they had to take, along with the pay, was not what they wanted. Unfortunately, it was what they had to settle for since they’d been out of the workforce for a few years.
The retiree noted that there was nothing worse than returning to work in their 70s, particularly when they believed that part of their life was done.
Unable To Help Family Out
Not only did they have to return to work because of their debt, but they couldn’t help out kids or grandkids because their own expenses were too high. This included providing financial assistance to family members looking to start their lives.
As a parent or grandparent, you want to do your best to provide financial support for those in your life. Being unable to do so can lead to feelings of disappointment.
Constant Feelings of Shame
All of these factors produced a sense of shame. Not only because most assume a retired person has the finances to enjoy life instead of stressing out about debt payments, but because of embarrassment. They felt embarrassed about their financial situation, having to return to work and being unable to travel.
After spending years or decades in the workforce, the last thing you want is to spend your golden years feeling ashamed of your circumstances.
*Note: The retiree, the client of a retirement planner, preferred to remain anonymous.
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