Many retirement-age Americans carry debt that looms over their finances, making it difficult to stop working and truly enjoy their golden years. A LendingTree study found that seniors in the 65-70 age group carry $22,471 in non-mortgage debt on average 一 but that retirement-age borrowers fared better in some cities than others.
LendingTree looked at the non-mortgage debt obligations for retirement-age Americans in the top 50 metro areas of the country. Here’s what we found.
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The kinds of debt seniors have
On average, Americans held a slightly higher percentage of credit card debt (35.4%) than auto loan debt (34.8%), although it’s pretty much a wash. This does show that for many retirement-age seniors, credit cards are just as much a burden as auto loans.
There’s some variation in how much auto loan debt is taken out from place to place. San Antonio has the highest proportion of auto debt at 45.1%, compared with New York at 24.3%. Access to public transportation could contribute to the large difference in auto loan debt between Texans and New Yorkers.
Personal loan debt comprised of 13.8% of the total debt of retirement-age seniors. In some places, it was much higher: Louisville, Ky. (17.5%) and Virginia Beach, Va. (16.7%), for example.
About 10% of Americans in the 65-70 age bracket carry student loans, but it’s probably not their own. It’s more likely that these borrowers co-signed loans and took out other loans on behalf of their children or grandchildren. Overall, student loans made up about 13% of the debt for retirement-aged seniors, on average.
Image Credit: iStock/hoodesigns.
Debt management and your retirement
Debt can put an undue burden on retirees. On top of keeping up with regular expenses, such as a mortgage and medical expenses, retired workers have to repay debt. The average monthly Social Security payment was $1,455.22 as of December 2019, and there’s not a lot of wiggle room in the budget when you’re not bringing in an income.
If you want to get rid of debt before retirement age, consider these debt management strategies.
Pay down debt before you retire
Paying the minimum balance on debt, particularly credit card debt, is a surefire way to end up making payments for a long time ー and paying a lot of money toward interest. To pay down debt before you reach your golden years, you could try a repayment strategy, such as a debt avalanche or debt snowball.
Consolidate debt with a personal loan or credit card
It’s easy to lose track of your debts when you have multiple accounts with different interest rates, due dates and balances. Debt consolidation helps you keep track of your finances by lumping them into one manageable payment.
Retirement-age borrowers can consider opening a personal loan for debt consolidation, which lets you pay down many debts with static monthly payments and a fixed interest rate. That way, you always know how much you owe and when you owe it. Prime borrowers with excellent credit scores will get better interest rates on debt consolidation loans than subprime borrowers.
Borrowers who are burdened by debt could also consider opening a balance-transfer credit card for more favorable debt repayment terms. To take advantage of this strategy, open a new credit card with a zero-interest promotional period (typically up to 21 months) and pay down the debt before that period expires. Keep in mind that you may be subject to balance-transfer fees (around 3%) and back-interest if you don’t pay off your debt before the end of the promotional period. Plus, not all borrowers will qualify for a credit card.
Meet with a credit counselor to help with your strategy
Borrowers who need help developing a debt management strategy can seek advice from a credit counselor. These counselors operate through nonprofit organizations and can help with credit, money management, debt management and budgeting. They may:
- Offer debt management advice
- Develop a budget with you
- Get a copy of your credit report
Many organizations offer a free credit counseling session. Plus, they’ll more than likely pass along free personal finance educational materials. Credit counselors may advise that you go under a debt management plan, which comes at a price. Find a certified credit counselor through the National Foundation for Credit Counseling or Financial Counseling Association of America.
Image Credit: iStock/Ridofranz.
Methodology
Using an anonymized sample of more than 44,000 My LendingTree users born between 1949 and 1954, researchers calculated total debt balances from third quarter 2019 credit reports. These results were then aggregated to the 50 largest metropolitan statistical areas to calculate median debt obligations (non-mortgage), as well as the average distribution of debts across the following debt types: auto, credit cards, personal loans, student and other.
Here are the 50 cities where seniors carry the most debt:
Image Credit: iStock/Pornpak Khunatorn.
50. San Jose, California
Median non-mortgage debt: $16,098
Average credit score: 718
Image Credit: DepositPhotos.com.
49. Portland, Oregon
Median non-mortgage debt: $17,334
Average credit score: 715
Image Credit: DepositPhotos.com.
48. Seattle
Median non-mortgage debt: $17,954
Average credit score: 711
Image Credit: DepositPhotos.com.
47. San Francisco
Median non-mortgage debt: $19,005
Average credit score: 716
Image Credit: EarthScapeImageGraphy/istockphoto.
46. Los Angeles
Median non-mortgage debt: $19,850
Average credit score: 711
Image Credit: DepositPhotos.com.
45. Salt Lake City
Median non-mortgage debt: $20,003
Average credit score: 711
Image Credit: DepositPhotos.com.
44. Detroit
Median non-mortgage debt: $20,036
Average credit score: 701
Image Credit: Getty.
43. Nashville, Tennessee
Median non-mortgage debt: $20,065
Average credit score: 703
Image Credit: Getty.
42. San Diego
Median non-mortgage debt: $20,108
Average credit score: 711
Image Credit: iStock/Jerry Uomala.
41. Louisville, Kentucky
Median non-mortgage debt: $20,166
Average credit score: 705
Image Credit: traveler1116/istockphoto.
40. Boston
Median non-mortgage debt: $20,262
Average credit score: 710
Image Credit: DepositPhotos.com.
39. Denver
Median non-mortgage debt: $20,418
Average credit score: 714
Image Credit: iStock.
38. Las Vegas
Median non-mortgage debt: $20,745
Average credit score: 699
Image Credit: iStock/f11photo.
37. Cleveland
Median non-mortgage debt: $20,758
Average credit score: 700
Image Credit: iStock/Sean Pavone.
36. Orlando, Florida
Median non-mortgage debt: $20,945
Average credit score: 700
Image Credit: iStock/SeanPavonePhoto.
35. Minneapolis
Median non-mortgage debt: $20,988
Average credit score: 713
Image Credit: StevenGaertner/istockphoto.
34. Tampa, Florida
Median non-mortgage debt: $21,085
Average credit score: 706
Image Credit: iStock/Kasra Keighobady.
33. Oklahoma City
Median non-mortgage debt: $21,325
Average credit score: 689
Image Credit: DepositPhotos.com.
32. Buffalo, New York
Median non-mortgage debt: $21,358
Average credit score: 702
Image Credit: iStock/Jacek_Sopotnicki.
31. Milwaukee
Median non-mortgage debt: $21,579
Average credit score: 707
Image Credit: iStock/Sean Pavone.
30. Sacramento, California
Median non-mortgage debt: $21,665
Average credit score: 711
Image Credit: Deposit Photos.
29. Columbus, Ohio
Median non-mortgage debt: $22,165
Average credit score: 700
Image Credit: aceshot / iStock.
28. Riverside, California
Median non-mortgage debt: $22,203
Average credit score: 703
Image Credit: iStock/Tim Gray.
27. Providence, Rhode Island
Median non-mortgage debt: $22,313
Average credit score: 702
Image Credit: iStock/Sean Pavone.
26. Hartford, Connecticut
Median non-mortgage debt: $22,818
Average credit score: 707
Image Credit: DepositPhotos.com.
25. New Orleans
Median non-mortgage debt: $22,903
Average credit score: 695
Image Credit: DepositPhotos.com.
24. Chicago
Median non-mortgage debt: $23,055
Average credit score: 701
Image Credit: DepositPhotos.com.
23. Raleigh, North Carolina
Median non-mortgage debt: $23,062
Average credit score: 709
Image Credit: traveler1116/istockphoto.
22. Phoenix
Median non-mortgage debt: $23,214
Average credit score: 711
Image Credit: Sean Pavone / iStock.
21. Charlotte, North Carolina
Median non-mortgage debt: $23,236
Average credit score: 709
Image Credit: iStock/Kruck20.
20. New York
Median non-mortgage debt: $23,349
Average credit score: 703
Image Credit: Eloi_Omella.
19. Miami
Median non-mortgage debt: $23,414
Average credit score: 704
Image Credit: DepositPhotos.com.
18. Philadelphia
Median non-mortgage debt: $23,450
Average credit score: 706
Image Credit: Pixabay.com.
17. Cincinnati
Median non-mortgage debt: $23,502
Average credit score: 699
Image Credit: NatChittamai.
16. St. Louis
Median non-mortgage debt: $23,557
Average credit score: 706
Image Credit: iStock/Sean Pavone.
15. Kansas City, Missouri
Median non-mortgage debt: $23,734
Average credit score: 689
Image Credit: DepositPhotos.com.
14. Memphis, Tennessee
Median non-mortgage debt: $23,900
Average credit score: 700
Image Credit: DepositPhotos.com.
13. Austin, Texas
Median non-mortgage debt: $23,911
Average credit score: 715
Image Credit: iStock/RoschetzkyIstockPhoto.
12. Atlanta
Median non-mortgage debt: $24,186
Average credit score: 701
Image Credit: iStock/lavin photography.
11. Virginia Beach, Virginia
Median non-mortgage debt: $24,382
Average credit score: 702
Image Credit: TK Fotoshop / iStock.
10. Baltimore
Median non-mortgage debt: $24,466
Average credit score: 704
Image Credit: Deposit Photos.
9. Pittsburgh
Median non-mortgage debt: $24,532
Average credit score: 702
Image Credit: iStock/f11photo.
8. Washington, D.C.
Median non-mortgage debt: $24,864
Average credit score: 711
Image Credit: vPaulTech LLC / iStock.
7. Dallas
Median non-mortgage debt: $25,023
Average credit score: 702
Image Credit: Deposit Photos.
6. Jacksonville, Florida
Median non-mortgage debt: $25,226
Average credit score: 701
Image Credit: iStock/Allen Allnoch.
5. Indianapolis
Median non-mortgage debt: $25,374
Average credit score: 700
Image Credit: Deposit Photos.
4. Birmingham, Alabama
Median non-mortgage debt: $25,407
Average credit score: 693
Image Credit: iStock/SeanPavonePhoto.
3. Richmond, Virginia
Median non-mortgage debt: $25,887
Average credit score: 704
Image Credit: Sean Pavone / iStock.
2. San Antonio
Median non-mortgage debt: $29,168
Average credit score: 697
Image Credit: Deposit Photos.
1. Houston
Median non-mortgage debt: $29,505
Average credit score: 701
This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.
Image Credit: E_Rojas.
