Aging Options

A Rude Awakening for Boomers: Odds Are You’ll Retire with Debt

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Are you a baby boomer beginning to look seriously at retirement? If you are, you’re certainly not alone: there are tens of millions of you out there! Your retirement years can indeed be a joy (our goal here at AgingOptions is to help make sure of that). However, you need to be careful and plan well in order to ensure that your retirement dreams match your eventual reality. As a bit of a wake-up call, we just found a brief but sobering article on the financial website Market Watch. It reminds boomers that there’s a good likelihood their retirement won’t be quite as stress-free as they had hoped. The one-word reason: debt.

This very recent article (you can click here to access it) calls debt “the common delusion that can wreck your lifestyle in retirement.” The reason debt is a delusion, claims the article, is that while 80% of average-income boomers have debt, more than half (53%) believe they’re going to retire debt-free. According to a Banker’s Life study quoted in the article, most of these boomers have too much debt to completely eliminate it before they retire. Servicing that debt may prove to be a major financial burden once full-fledged retirement begins.

Banker’s Life looked at middle-income boomers, defined as those with annual income of $25,000 to $100,000 and less than $1 million in investable assets – a very broad cross section of people. About 80% of these households have debt, with the average pegged at just over $70,000. In terms of the number of households with various types of debt, credit card debt is by far the most common category, followed by mortgage debt and car loans. Fewer than 20% of middle-income boomer households can claim to be debt free.

For most of us, a modest amount of manageable debt may not be a problem. Some financial planners use a 1o percent benchmark, suggesting that servicing all your debts should take up no more than one-tenth of your income. But the Market Watch article says that more than a quarter of boomers are spending four times that percentage, nearly 40 percent of their income servicing their debts. Many boomers (about one-quarter) have home mortgages that still have more than 20 years remaining. As Market Watch concludes, “All this debt is likely to put a crimp into the free-wheeling, traveling-often retirement lifestyle that many boomers say they want.”

Whether it’s a plan to eliminate debt or a plan to optimize Social Security, putting together an honest, objective, comprehensive financial plan for your retirement is a vital element in ensuring that you’ll be able to protect your assets as you age. That includes assessing your debt situation carefully to make sure that those obligations don’t cause such a burden in your retirement years that they ruin your dreams. Remember, however, that a good financial plan alone is not enough. You need a retirement plan that covers all facets of your future as you age. It’s not just about your money.

Is there an approach to retirement planning that covers all the critical bases? Fortunately the answer is yes. We call it LifePlanning, and it represents a breakthrough in the process of preparation for retirement. A LifePlan not only protects your finances, but it also ensures that all your legal affairs are in order, your housing plans have been considered, your medical coverage is in place and your loved ones are fully informed of your wishes and plans. A LifePlan is your blueprint to help you create the retirement you’ve always hoped for.

To find out more – with no cost or obligation whatsoever – we invite you to attend a free LifePlanning Seminar. You can find out dates, locations and times, and also register online, simply by clicking on the Upcoming Events tab. Seminars do fill up quickly, however, so don’t delay. You can also contact our office during business hours and we can assist you with registration. Remember, you don’t have to be disappointed in retirement! Come to a LifePlanning Seminar and let us help you plan for a fruitful and secure future. We’ll look forward to meeting you soon.

(originally reported at

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