What debts should you pay off before retirement? Start by prioritizing high-interest debt, which often includes credit card balances, payday loans, and certain personal loans.
Carrying $25,000 in credit card debt may feel manageable while a steady paycheck covers your expenses and retirement contributions. Once you retire, however, your savings may need to pay today’s bills while continuing to grow for expenses decades into the future.
Credit card interest rates of 25% or more can quickly consume retirement income and force larger portfolio withdrawals. Paying off high-interest credit card debt before retirement can reduce monthly expenses, preserve your savings, and improve your financial flexibility.
After addressing high-interest debt, evaluate other obligations based on their interest rates, monthly payments, tax treatment, and impact on retirement cash flow. Low-interest mortgage debt does not always need to be paid off before retirement, especially if doing so would drain your emergency savings or require a large taxable retirement-account withdrawal.
The Consumer Financial Protection Bureau explains that prioritizing debts with the highest interest rates and fees can reduce the total amount you pay over time. Review its debt-reduction guidance.
If this is your first time with me, I’m Elizabeth.
• I help women navigate taking over the finances after widowed, divorce or illness
• I help people comfortably retire 10 years early
• We provide sustainable, predictable income in retirement
• $200 million and thousands trust us with their retirement planning (as of 8/1/2026)
• Book an intro call. https://calendly.com/nova-wealth-intro/novawealthintro
• Join the Second Half. https://retirenova.com/resources
