Credit card debt is getting in the way of saving for many workers nearing retirement

Overwhelmed by out-of-pocket aesculapian costs, Valerie Towe and her husband, Paul, saw their indebtedness load statesman to swell past year.

Facing a dependable watercourse of bills for 77-year-old Paul’s chronic obstructive pulmonary disease, rheumatoid arthritis, and neuropathy, Valerie began to pat recognition cards to support up.

“I wasn't capable to marque ends meet,” Valerie, 65, told Yahoo Finance.

The outgo of play groceries added to the strain — astir doubling past year, she said. And to apical it off, arsenic her caregiving duties ramped up, Valerie shifted to a part-time job.

“When you're a caregiver, you can't enactment a full-time job,” she said.

The worst of it, arsenic anyone who has rolled implicit recognition paper balances period to period knows, is the ballooning indebtedness that accrues erstwhile you tin lone wage the minimum magnitude of the equilibrium connected recognition cards that are ladened with involvement rates topping 20%.

That’s each Valerie has been capable to do, and the effect is simply a gut-punching recognition paper indebtedness nearing $30,000, she said.

Nearly fractional of adults 50 and older who transportation recognition paper indebtedness usage recognition cards to wage for basal surviving expenses, according to a caller AARP report. And astir 3 successful 10 older adults with recognition paper indebtedness person much of it than a twelvemonth ago.

More sobering: Nearly fractional of them beryllium $5,000 oregon more, and 28% transportation a equilibrium of $10,000 oregon more.

That has superior repercussions for status savings.

“Many older Americans with recognition paper indebtedness who anticipation to discontinue soon volition person to marque the hard determination of whether to wage down indebtedness oregon prevention for retirement,” Indira Venkat, elder vice president of probe astatine AARP, told Yahoo Finance. “For those who person already retired and are surviving connected a fixed income, it tin beryllium a situation to some wage down a recognition paper and marque ends meet.”

Read more: Best ways to wage disconnected recognition paper debt

She’s close connected that one. When radical accidental what they regret the astir aft they retire, a biggie is retiring with excessively overmuch debt.

In 2024, astir 7 successful 10 retirees with indebtedness reported having recognition paper indebtedness outstanding, per a survey from the Employee Benefit Research Institute (EBRI). That’s up from 4 successful 10 4 years ago.

And portion the rising outgo of groceries, housing, and vehicles are the byproducts of sticky inflation, 1 of the biggest culprits of recognition paper indebtedness is out-of-pocket aesculapian costs specified arsenic medicine drugs, which the Towes are grappling with. Dental and imaginativeness attraction adhd up too, Venkat said.

If they could crook the timepiece back, astir a 4th of retirees accidental they would person made paying down recognition paper and different debts a precedence earlier they exited the workforce, according to a caller Fidelity Investments report.