Retiring debt-free may not be possible, but living stress-free is within reach.

“Neither a borrower nor a lender be.”

This oft-quoted line from Shakespeare’s Hamlet may have been good advice in the 16th century, but it’s not terribly realistic today. According to the National Council on Aging, older adults increasingly are retiring with debt and are carrying greater amounts of debt than ever before. Recent research published on real estate site Clev-er compounds this fact with the impact of the pandemic, noting that retirees more than doubled their debt in 2020.

So, what to do? For starters, take the long view. “People look at retirement… like this drop-dead date. It’s this monumental time that is coming, and it’s looming,” says Conor Boyd, managing partner of Thorough-bred Advisors. Boyd sees clients put undue pressure on themselves about their retirement date, despite the fact that they won’t need access to all their assets on day one. Proper financial positioning, he says, can transform that stress into a manageable challenge to be solved gradually, which “allows you to enjoy your retirement along the way.”

Here are some tips to make your retirement more stress-free.

1. Consider your overall financial picture.

“You don’t want to give up your retirement for debt,” says Frank T. Guiffre, a certified financial planner with Halliday Financial. In other words, while it might be possible—and feel great—to liquidate your assets and achieve zero debt, leaving yourself with no money in the bank doesn’t exactly prepare you to retire. Like-wise, says Boyd, it might make sense for recent retirees to defer taking a distribution from an IRA or 401(k) to pay off debt until the following year when their taxable income might be significantly less.

2. Structure debt strategically.

Both Boyd and Guiffre make a distinction between different types of debt. Credit cards, for instance, currently have interest rates averaging around 16 percent. Roughly speaking, that means that you’re paying a dollar for every six dollars that you borrow. By contrast, home equity loans and lines of credit have interest rates around a third of that amount. Using home equity to pay off credit card debt is a smart move to prioritize the elimination of “bad” debt—although Boyd acknowledges that this kind of re-positioning can be challenging for clients, given the psychological investment many of us make in having our homes completely paid off.

3. Be careful with credit cards.

While a high credit balance represents bad debt, Guiffre says, “That’s not to say that you can’t have credit cards in retirement. You have to have them responsibly.” That could mean taking a disciplined approach to pay off your balance each month, or perhaps every two months, or postponing new purchases until you pay off the previous ones. And it may be a good idea to switch from maintaining multiple cards to carrying just one. “Most people get into more trouble, the more credit cards they have,” Guiffre says.

4. Don’t sweat (too much) over some types of debt

That’s not to say you shouldn’t be responsible about all your debt, but some types can be resolved relatively easily. One example is medical debt. “Hospitals have such a low rate of recovery on medical debt that they’re often just thrilled to have somebody who’s responsibly speaking to them,” says Boyd. Another example is student loans that you may have cosigned for a son or daughter who is now in the workforce. “Maybe it’s time to have them take it over independently,” says Guiffre, “getting your name off of the loan.”

5. Don’t expect debt to die when you do.

Taking the long view is important not only for your lifetime but for your legacy as well. The types of debt that can be passed to your next of kin vary by state, but it’s a mistake to imagine it will sort itself out neatly on its own. “What you’re creating there is a lot of headaches for the next generation,” says Guiffre. Maintaining a life insurance policy is one way to ensure your debts get satisfied and your heirs are left with something that creditors can’t touch. “With life insurance, you can instantly create an estate,” says Boyd.

6. Work with a financial planner.

An experienced outsider can see solutions that may be harder for someone mired in debt-related stress to discern. “It’s been ingrained in us from the time we were kids that you need to satisfy your debt,” says Boyd. A lot of his clients feel so burdened by it, in fact, that they’ll “inadvertently hurt themselves for the future.” Both Boyd and Guiffre note the importance of taking stock of every re-source and finding a way to make them work with one another, which is of course the raison d’etre for their respective businesses. “The whole idea is simplifying,” says Guiffre. “You might have bank accounts here, in-vestment accounts here, this credit card over here, this mortgage over here… what’s very empowering is when you feel in control.”


Managing Partner, Thoroughbred Advisors
(518) 608-4608 •

Regional Manager, Halliday Financial
(518) 463-2200 •