How Debt Can Affect Retirement

by Guest on October 24, 2013

For some, retirement is but a dream of Caribbean cruises, afternoon naps, and many, many rounds of golf. But for others, it can be a daunting reality due to the decreasing number of pensioned employment opportunities. The notion that we can make choices that will permanently affect our retirement can be a scary thought but also very true, and we must account for it. The following are a list of consequences that are possible when going into retirement with a significant amount of debt to repay.

Reduced Quality of Life

Most studies indicate the majority of all retired Americans and Canadians carry debt. Some debt can be OK and actually a means to an end. It’s important to keep in mind that most retirees have a fixed income, which means that any unexpected costs can easily cost more than one’s income can afford. If a retiree experiences a debt problem, then it will significantly reduce the quality of life that they planned for.

Emotional Toll

Quality of life is not only reduced in a financial sense but also an emotional one. The ideal for retirement is that we can be happy and fully enjoy time spent doing those things that we couldn’t do while raising families and working. Things like travelling and taking up new hobbies can be costly when you no longer can rely on a substantial income. Unfortunately, debt is one of the most stressful challenges we face in life. And this can be even more stressful for those in retirement looking to spend their money on pleasure.

Delayed Retirement

As many people near retirement, they find themselves in too much debt and simply can’t retire. In fact, a growing trend in North America is that people are delaying retirement longer and longer. The scariest aspect of this trend is that there comes a time for everyone when retirement is no longer an option, and then the person has no option but to deal with the difficulties outlined above.

Restricted Retirement

For most, retirement is about ideals. We idealize how we want our retirement to be, and then we work to achieve that goal. However, if we create debt during our pre-retirement life that we can’t compensate for one’s dreams are undermined. The person who dreams of moving to Florida may have to remain locally and reduce their cost of living significantly.


As you manage your debt, do so with retirement as a deadline in mind. Begin with a pre-authorized contribution plan into a savings account when your young, and begin thinking about a long-term investment plan for the future. 

  • Kurt @ Money Counselor

    If you’ve got significant debt, perhaps you shouldn’t retire!

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