Don’t let debt follow you like a stalker into retirement: Expert tips for those 50+

Retirement is the common end goal to a lifetime of hard work, and you can enjoy it all the more if you make some financial preparations in your final income-earning years. One of the biggest pieces of advice you may have heard is to try to tackle any debt you have before you say goodbye to the workforce – especially the high-interest kind.

Read: The ‘Sandwich Generation’ has a retirement problem

Discover: Know the nuances of Medicare & Medicaid to save money

The key is using smart strategies for reducing your debt, especially at a time of life when you might have sandwich generation-related financial responsibilities. We spoke with personal finance expert and YouTube creator Beverly Harzog, about which types of debt you should prioritize as you approach retirement and the best ways to achieve financial freedom.

Not all debt is created equal

When talking about reducing debt prior to retirement, it’s important to recognize that some debt is worse than others. At the top of your priority list should be high-interest debt, namely credit card debt.

According to the most recent data from Experian (one of the three major credit bureaus), people over 50 have the highest levels of credit card debt in the nation. The study breaks down debt by generation, and these were the specific findings:

• Generation X (ages 45 to 60) has an average balance of $9,600
• Baby boomers (ages 61 – 79) owe an average of $6,795

In fact, revolving credit card debt is the reality for 46% of adults over age 50, according to a March 2025 AARP survey. It also revealed that 47% of those who have credit card debt are worried about it. And with good reason.

“You need to be aware that if you go into retirement with credit card debt, that’s toxic debt,” says Harzog, who hosts a YouTube channel about how to become financially independent to enjoy retirement. “The interest you pay is money wasted that could be used on things that you want to do after you start collecting Social Security,” she says.

On the other hand, if your credit cards are paid off but you still have a mortgage, that’s more of a gray area. “Not everybody can pay their house off and not everybody should,” says Harzog. For example, if you have a very low mortgage interest rate, paying off your home loan may not be the best use of your nest egg.

That said, if there’s anything you can do to avoid going into retirement with a car loan, Harzog is a big proponent of that. For example, she’s always tried to pay cash for used cars and driven them for many years. And then during that period, she saves for her next car.

Choose your debt payoff strategy

Whether it’s credit card debt or lingering student loans, putting your energies into getting rid of those debts can set you up for a more financially secure retirement.

“So many people are living paycheck-to-paycheck, and that’s really tough,” says Harzog, but it’s in your power to make small changes that add up.

If you have multiple credit card balances, the two popular options for strategic payoff are the “snowball” and “avalanche” methods. As Harzog explains in her book “The Debt Escape Plan: How to Free Yourself from Credit Card Balances, Boost Your Credit Score, and Live Debt-Free,” she likes to recommend a hybrid of the two that she calls the “blizzard” method.

• Snowball method: You focus all of your available funds toward your smallest balance while paying the minimum amount owed on the others. Once you pay off the card, you shift to the next smallest balance. The quicker wins can keep you motivated.
• Avalanche method: Focus on the card with the highest APR first (and pay the minimums on the others). This allows you to save the most money since you’ll be knocking out the higher APR cards first.
• Blizzard method: Start out with a snowball to get that first, quick win, but then switch to avalanche to save more money.

Fast-track your progress with debt consolidation

If you have a strong credit score, you might consider opening a new line of credit that is designed to help you combine and pay off other debts.

Option 1: A balance transfer card. “This is perfect because you can pay off an existing debt without paying any interest for anywhere from about 12 to 21 months (depending on the card offer),” says Harzog. But you have to approach it very seriously, and not use that card for anything other than paying off debt. Don’t use your old card for unnecessary spending either, or you’ll end up with two balances instead of one.

Option 2: A debt consolidation loan. You’re not going to get 0% APR, but you will most likely get a lower interest rate than what’s on your credit cards. The loan will be used to pay off all your other debts, and then you’ll just have the one loan payment to worry about.

Attack toxic debt aggressively

Whichever method you’re using, following through is key. Simply put, you’ll want to throw whatever extra money you can come up with at your debt. “This buys your freedom back, and it feels fantastic,” says Harzog.

Some ideas:

Revamp your budget. Look over your spending patterns to identify areas where you can trim back your spending to use toward your balance. Just don’t try to cut out everything that brings you joy, since that will backfire, warns Harzog. “Think about downsizing expenses instead of giving up everything that is important to you. That way it doesn’t feel like you’re suffering for the rest of your life.”

Consider selling something. If you have something of value or maybe some stock (that’s separate from your retirement funds), that chunk of cash could make a larger dent in your debt. There could be an opportunity cost or an emotional one if you’re giving up something with sentimental value. “You have to look at the tradeoffs when you make that decision. Money is very personal. And if it gives you peace of mind, then it can be the right choice for you,” says Harzog.

Pick up some extra income. Whether you start a side hustle or ask for extra overtime, make that extra cash go only toward your debt to make faster progress. The same goes for any bonuses you may receive, or windfalls like tax returns or monetary gifts.

There is one thing you should avoid doing, however: Dipping into your 401(k), or any fund where penalties are involved. 

Don’t Let Debt Derail Your Retirement

“I can tell you from personal experience now that I’m at retirement age, there will be expenses as you get into your 60s and 70s that you’re not aware of when you’re in your 50s,” says Harzog. And piling those new expenses on top of existing debt while living on a fixed income can cause a lot of strain.

Putting effort into a focused debt payoff plan while you’re still in your working years, can help ease your transition to retirement later on.

More from Nifty50+

• If I were 1-5 years from retirement, here is where I would invest
• Meet Angie behind ‘Angie’s List’; Building An Empire Through Persistence
• Should you cancel your credit cards when you retire?
• Rightsizing: A Positive Approach to Downsizing for 50+