More than 25% of retired investors are paying down mortgage, credit card debt

The data from Nationwide illustrates the challenges of making ends meet in retirement July 9, 2024,By Chris Clow.

Over a quarter (26%) of retired investors continue to pay off their mortgage, and precisely one-quarter of the cohort are continuing to pay down credit card debt, according to a new survey from the Nationwide Retirement Institute.

The U.S. retirement population is getting older at a faster rate and are also confronted with inflation as an impediment to making ends meet. According to the survey, 22% of older investors are concerned about their ability to afford typical monthly bills.

“The picture of life after retirement has changed for many people as economic stressors continue to weigh on retired investors,” said Mike Morrone, VP of Nationwide’s annuity business development division. “Now is the time for advisors and financial professionals to check in with their clients and help them remain calm, nimble and informed in the face of continued economic headwinds, ensuring the plan they have in place continues to position them for a secure retirement.”

Economic constraints have also caused this cohort to pull back on some of the things they wanted to do in retirement, including leisure travel. 39% of surveyed retired investors said they were spending less on entertainment, while 34% also reported pulling back on things like leisure trips or vacations.

More than one-in-five retired investors (22%) are also withdrawing more from their retirement accounts, accelerating “decumulation” following the end of a career.

But such investors are also taking further action to shore up their retirement stability. Sixty-three percent of surveyed investors have some kind of strategy in place to protect against market risk, up from 54% one year ago.

More retired investors are also proactively initiating conversations with trusted advisors and loved ones about legacy planning, including for long-term care, funeral expenses and financial details of their estate with those they plan on naming as heirs.

Financial advisors are also factoring into these plans more, according to the results.

“Advisors are recognizing and acknowledging investors’ desire to avoid making the wrong moves in retirement,” Morrone added. “They can help clients feel more confident about their retirement plans by understanding their goals and anxieties, and helping them protect their savings and plan for income they won’t outlive by reinforcing the value of different retirement solutions and products.