Many Expect to Carry Debt into Retirement

The survey, “Retirement Time Bomb: Mortgage Debt,” found that of those carrying debt into retirement, more than half (55%) carried $25,000 or more and more than one-fifth (21%) held $100,000 or more in debt. The percentage of pre-retirees who expect to carry mortgage debt into retirement increased 123% since the last survey in 2009. More than 67% of Boomers currently expect to carry mortgage debt into retirement, compared to 30% in 2007 and 2009.

“Mortgage debt is a dark cloud over pre-retirees’ financial futures,” said Michelle Hall, manager of Market Research at Securian. “Before the Great Recession, they may have expected to sell their homes at a profit and add it to their retirement nest eggs. Years of home devaluations and high unemployment dramatically changed many Boomers’ financial plans.”

Forty-six percent of the pre-retirees surveyed said they expect to carry various types of debt into retirement. Nearly half (48%) expect their debt to equal or exceed their savings at retirement.

The most frequently-named types of debt held at retirement in 2013 were: 

• Mortgages (59%);
• Credit cards (59%); and
• Auto loans (31%).

While many expect to carry debt into retirement, the 2013 survey found that fewer retirees actually did. Just under half of the 526 retirees (49%) carried any kind of debt when they retired, this compared to 71% in the 2007 and 67% in 2009.

About one-third (32%) of the retirees said they incurred debt after retiring. Nonetheless, more than half (53%) said debt is “something you should avoid if at all possible.”

The survey results can be found here.