In particular, only 37% of retirees do not have any debt, according to an Employee Benefit Research Institute (EBRI) study. 1 While that is not always a bad thing—some debt, like a low-interest mortgage, can be financially advantageous—that still leaves many people struggling in retirement.
Currently, more than 9 million households age 65 or older have mortgage debt (Rexrode 2020). data, similarly reports 37.1% of homes were without a mortgage in 2017 (Neal 2019).
Method 2: the 25x rule
Following the 25x rule, you multiply your anticipated first-year retirement spending by 25. For example, if you plan to spend $60,000 in your first year of retirement, you should aim to save $1.5 million.
The old adage 'Retire without debt' may be going the way of the electric typewriter and rotary phone. A new analysis from the personal finance site LendingTree finds that 97% of retirement-age adults have non-mortgage debt. The average balance: $11,349.
In most cases, it would be preferable to retire without a mortgage. Few people will benefit financially from this debt, and fixed-income payments may become more challenging to manage. However, paying off a mortgage before retiring isn't always possible.
The median amount of home equity for adults age 65 and older is $250,000, up 47% from pre-pandemic levels. Housing wealth is many retirees' main asset. Almost one in three homeowners age 75 and older now carries a mortgage, triple the rate from 1998. The median mortgage debt is about $107,000 for that age group.
When It Costs Too Much to Repair. While the value of real estate property generally increases over time, there may be a point at which the costs of renovations and repairs outweigh the benefits. Economics professors caution individuals to do a “cost vs benefit analysis” before making any financial decisions.
The top ten financial mistakes most people make after retirement are:
For those nearing retirement age, though, Orman offers different advice: If you're in your forever home, pay off your mortgage by the time you retire. Considering that baby boomers own 38% of America's housing stock—and more than half plan to never sell—is an important caveat.
What it means to have a credit score of 800. A credit score of 800 means you have an exceptional credit score, according to Experian. According to a report by FICO, only 23% of the scorable population has a credit score of 800 or above.
In 2018, Certified Financial Planner Wes Moss wrote this: “For every $1,000 per month you want to have at your disposal in retirement, you need to have $240,000 saved.” (Source: WesMoss.com). He called this “The 1,000 Bucks-A-Month Rule.”
Average individual retirement income: $60,000/year or $5,000/month. Median individual retirement income: $47,000/year or $3,900/month. Average retirement income for couples: $100,000/year or $8,300/month. Average monthly Social Security benefit: $1,976/month (as of January 2025) [2]
According to the Federal Reserve Survey of Consumer Finances (SCF), just 3.2% of retirees have reached $1 million or more in their accounts (1). This is troubling news if you count yourself among the 40% of retirees who say they'll need at least $1 million for true financial security in retirement (2).
Paying off a mortgage earlier used to be more common - 40% of borrowers who took out a mortgage in 2017 will be over 65 when their mortgage matures. But 34% of all mortgages are now lasting longer than 30 years (compared to just 20% in 2007), so paying off a mortgage in retirement is becoming increasingly common.
One in five Americans over the age of 50 have no retirement savings, according to a survey by the AARP. And even if you have something tucked away, it may not be enough — though that is something you can change even late in the game.
He goes on to say: “Paying off your mortgage early seems impossible but it is completely doable and people do it all the time, but how can you do it and why would you want to put in the extra effort? Paying off your mortgage early will rev up your wealth building.”
To comfortably afford a 400k mortgage, you'll likely need an annual income between $100,000 to $125,000, depending on your specific financial situation and the terms of your mortgage.
That makes sense, of course, as older Americans have had a longer time to make payments. But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s.
How many Americans have $500,000 in retirement savings? Of the 54.3% of U.S. households that have any money in retirement accounts, only about 9.3% have $500,000 or more in retirement savings.
Moynes refers to as the 3 D's: depression, divorce, and cognitive decline. This period can be incredibly challenging as retirees struggle to find a new sense of purpose and direction without the familiar structure of their careers.
Retirement Regrets: Top 15 Things Retirees Wish They Had Done Differently
5 things to avoid that can devalue your home
The 30% rule in home renovation suggests that homeowners should limit their renovation costs to no more than 30% of their home's current market value. This guideline helps ensure that the investment made in renovations aligns with the overall value of the property, thereby protecting the homeowner's equity.