A Minneapolis mother of two thought her family was making steady progress, until a single financial decision quietly blew a hole in their budget. Her husband refinanced their car to pull out $3,000 in cash and the move left them stuck with a crushing 25% annual percentage rate. The caller, Cathy, shared her story on “The Ramsey Show” with hosts George Kamel and Ken Coleman. What started as an attempt to cover short-term expenses quickly turned into a long-term financial problem that now threatens to snowb ...

Core Insights - Carrying debt into retirement is increasingly common among Americans, particularly those aged 65 and older, due to factors like longer loan terms, inflation, and rising housing costs [1] Group 1: Average Debt Load - Americans aged 64 to 74 have an average debt load of $134,950, which is historically high [2] - The median total debt for the same age range is reported to be $45,000, with approximately 65% of adults in this group holding at least one type of debt [3] Group 2: Non-Mortgage Debt - A significant 97.1% of Americans aged 66 to 71 have non-mortgage debt, with a median balance of about $11,349, which includes personal loans, auto loans, credit card balances, and student loans [5] Group 3: Implications of Debt Levels - Having more debt than the average of $135,000 does not necessarily indicate financial distress; it suggests a need for a strategic plan to manage the debt [6] - If the debt is primarily mortgage-related and payments are being made regularly, individuals may be in a stable financial position, especially with low interest rates [7]

Core Insights - Carrying debt into retirement can significantly strain finances, particularly affecting fixed income and essential spending [2][3][4] Debt Impact on Retirement - Millennials and Gen Xers have the highest non-mortgage debt, averaging $11,000 and $10,000 respectively [2] - Non-mortgage debt creates cash flow pressure for retirees, as income becomes fixed and predictable [3] - High-interest debt, such as credit cards, can erode fixed income, limiting spending on essentials like healthcare [4][6] Debt Management Strategies - Prioritizing high-interest debt is crucial, as the average APR for credit cards was 21.39% in August 2025, compared to a 15-year average annual return of 12.18% for the S&P 500 [6] - A comprehensive understanding of finances is essential for developing a debt payoff strategy before retirement [7] - Pre-retirees are advised to create a realistic retirement budget, list all debts, and implement a payoff plan, focusing on high-interest debts first [8]