Cities where retirement-age Americans carry the most & least debt

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While retirement is a life stage most Americans plan for, many aren’t financially prepared for this step. One common obstacle to a sound retirement plan is debt.

Workers often ramp up retirement contributions leading up to their target retirement age, but those with debt payments and interest to cover will have fewer funds available to save.

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Budgets at the breaking point

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Debt is even more burdensome when it’s carried over into retirement. Paying for the usual ongoing expenses on a fixed income can be a stretch, and adding debt payments on top of that can push retirees’ budgets to the breaking point.

We wanted to see where those in the traditional retirement-age range (65 to 70 years old) may be particularly encumbered by debt. To do so, we calculated the median non-mortgage debt balances for retirement-aged people in the 50 largest metros, and we also calculated the average distribution of debt. Here’s what we found about where retirement-age consumers owe the most.

Image Credit: DepositPhotos.com.

Methodology

In our analysis, we used anonymous data on non-mortgage debt obligations for people aged 65 to 70 years old (born between 1948 and 1953) to find the median balance of this cohort in each city. Some people in this group will have recently retired, while others will be preparing to retire, and some may plan to work for a long time to come (whether by preference or not).

As part of our analysis, we also looked at the types of debts owed by retirement-age borrowers. As with the Millennial Debt Balance study, it appears that the big differential in balances is auto debt. Credit card debt is also more common among this group.

Student debt and personal loans account for a smaller portion of retirement-age Americans’ debt balances. Even so, retirement-age borrowers still face student debt. About 10% of people in this age bracket carry student loans; these are most likely parent PLUS loans or co-signed private student loans taken on behalf of children.

Image Credit: DepositPhotos.com.

Cities where retirement-age residents carry the most debt

These are the 10 U.S. cities where people aged 65-70 carry the most non-mortgage debt.

Image Credit: DepositPhotos.com.

10. Memphis

Median non-mortgage debt: $22,334

Average credit score: 694

Image Credit: Sean Pavone/istockphoto.

9. Buffalo, New York

Median non-mortgage debt: $22,482

Average credit score: 702

Image Credit: mphillips007/istockphoto.

8. Virginia Beach, Virginia

Median non-mortgage debt: $23,398

Average credit score: 701

Image Credit: DenisTangneyJr.

7. Richmond, Virginia

Median non-mortgage debt: $23,642

Average credit score: 700

Image Credit: Sean Pavone / iStock.

6.Oklahoma City

Median non-mortgage debt: $24,644

Average credit score: 700

Image Credit: tobynabors / iStock.

5. Washington, D.C.

Median non-mortgage debt: $25,202

Average credit score: 702

Image Credit: Sean Pavone.

4. Dallas

Median non-mortgage debt: $25,604

Average credit score: 699

Image Credit: typhoonski.

3. Houston

Median non-mortgage debt: $26,219

Average credit score: 700

Image Credit: RoschetzkyIstockPhoto.

2. Austin, Texas

Median non-mortgage debt: $26,424

Average credit score: 703

Image Credit: Sean Pavone/istockphoto.

1. San Antonio

Median non-mortgage debt: $29,993

Average credit score: 695

Image Credit: Pgiam/istockphoto.

Cities where retirement-age residents carry the least debt

These are the 10 U.S. cities where retirement-age residents have the least non-mortgage debt.

Image Credit: DepositPhotos.com.

10. Nashville, Tennessee

Median non-mortgage debt: $18,567

Average credit score: 703

Image Credit: Getty.

9. San Francisco

Median non-mortgage debt: $18,495

Average credit score: 711

Image Credit: kropic1/shutterstock.

8. San Diego

Median non-mortgage debt: $18,377

Average credit score: 707

Image Credit: Dancestrokes/shutterstock.

7. Providence, Rhode Island

Median non-mortgage debt: $18,356

Average credit score: 701

Image Credit: DepositPhotos.com.

6. Detroit

Median non-mortgage debt: $17,490

Average credit score: 698

Image Credit: pawel.gaul/istockphoto.

5. Milwauee

Median non-mortgage debt: $17,142

Average credit score: 703

Image Credit: Joseph Sohm/shutterstock.

4. Sacramento, California

Median non-mortgage debt: $16,910

Average credit score: 704

Image Credit: Andrew Zarivny/shutterstock.

3. Portland, Oregon

Median non-mortgage debt: $16,224

Average credit score: 707

Image Credit: DepositPhotos.com.

2. San Jose, California

Median non-mortgage debt: $15,499

Average credit score: 704

Image Credit: Courtesy of wikimedia.org.

1. Louisville, Kentucky

Median non-mortgage debt: $15,093

Average credit score: 703

Image Credit: traveler1116/istockphoto.

Tips for managing debt in retirement

Our study highlights some geographic trends for borrowing among retirement-age Americans, but it doesn’t capture the experience of every person. Whether they live in one of the worst or best cities, or another part of the country altogether, retirement-age borrowers can feel the stress of debt.

Dealing with debt can cause workers to delay retirement to try to save more, or cause stress in retirement. They can even force retirees into tough choices, such as having to draw upon Social Security earlier than planned or withdrawing too much from retirement accounts.

For borrowers near or in retirement, finding a way to effectively manage debt can relieve some of this financial pressure and help preserve retirement savings.

Focus on paying debts off ahead of retirement. If you’re worried about your debt, it could be smart to work on making extra payments to eliminate this debt. Once it’s gone, you’ll have one less monthly cost to worry about — and you’ll save in interest charges, too.

Refinance or consolidate debt. Restructuring debt can be a smart option to get debt under control in retirement. If you can’t pay off your mortgage before retiring, for example, refinancing could help lower payments so they’re affordable on your fixed income.

Or if you have high credit card balances, consider debt consolidation. Many people will get a personal loan rate that beats their credit card APRs. You can also choose the loan terms that will result in monthly payments that fit into your budget.

Consider pursuing debt relief. Retirees already drowning due to debt should look into options that will provide relief from this debt. Debt relief options can provide borrowers in or near retirement with more ways to handle debt payments when their costs have exceeded their ability to pay.

Dealing with debt can be a struggle for anyone — but it’s especially tough for retirees on fixed incomes. This makes it all the more important to actively manage your debt as you get close to retirement or enter this next stage of life. These solutions can help get debt under control and keep your retirement plans on track.

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

Image Credit: CompareCards.com.

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