How much debt do retirees have depends heavily on age: 61% of households 65 and older owe something, yet the typical debtor owes $47,000, not the six-figure averages that circulate online.
In the Federal Reserve’s 2025 Survey of Consumer Finances, 60.8% of U.S. households headed by someone 65 or older carried debt. Among those with debt, the median balance was $47,000 and the mean about $120,900. Mortgages drive the totals: 32.2% still owed on their home, with a median balance of $114,000.
By Craig Wear, CFP® | Last reviewed: October 26, 2026
Key Takeaways
- Debt prevalence falls steadily with age in the 2025 data: 70.2% of households 65 to 69 owe money, versus 46.1% of households 80 and older (Q3 tabulation of the Federal Reserve SCF 2025 public data).
- Among homeowners aged 65 to 79, 43.1% still carried a mortgage or home equity line on their primary residence in 2025, up from 41.1% in the 2022 survey (Q3 tabulation, SCF 2022 and 2025).
- One in three households 65 and older (33.2%) carried a credit card balance after their last payment; the median balance among them was $2,800, below the $3,100 median the Fed reports for all families (Federal Reserve, Changes in U.S. Family Finances from 2022 to 2025).
- Households 65 and older still in the workforce are far more indebted than retired ones: 73.4% owe money (median $89,000) versus 56.4% of retired households (median $37,000) (Q3 tabulation, SCF 2025).
- Only 32.8% of mortgage holders 65 and older have retirement account balances at least as large as their mortgage; 46.9% hold no retirement account at all (Q3 tabulation, SCF 2025).
- Withdrawing the 2025 median senior mortgage balance from a traditional IRA in one year would push a hypothetical single 72-year-old’s 2026 AGI past the $109,000 Medicare IRMAA threshold (CMS 2026 fact sheet).
Retiree Debt in 2025: Four Numbers From the Federal Reserve Survey
Q3 tabulation of the Federal Reserve’s 2025 Survey of Consumer Finances summary extract, weighted (WGT), all five implicates, 2025 dollars. Age is the age of the survey’s reference person.
How much debt do retirees have?
A household headed by someone 65 or older that carries debt owes a median of $47,000, and 60.8% of these 40.1 million households carry some debt. Those figures come from a Q3 Advisors tabulation of the Federal Reserve’s 2025 Survey of Consumer Finances (SCF), released October 9, 2026. The Fed’s own report gives debt figures for all families but not the finer age splits below, so the table is computed directly from the public microdata.
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| Age of household head | Households | Any debt | Median debt (debtors) | Mortgage or HELOC on home | Credit card balance | Vehicle loan |
|---|---|---|---|---|---|---|
| 55 to 64 (for comparison) | 23.2M | 81.4% | $101,000 | 48.0% | 49.4% | 35.4% |
| 65 to 69 | 11.7M | 70.2% | $59,000 | 37.1% | 38.4% | 26.6% |
| 70 to 74 | 10.3M | 64.9% | $51,400 | 37.4% | 37.2% | 21.6% |
| 75 to 79 | 9.5M | 58.0% | $30,000 | 28.2% | 29.2% | 20.4% |
| 80 and older | 8.6M | 46.1% | $38,850 | 23.9% | 25.7% | 10.0% |
| All 65 and older | 40.1M | 60.8% | $47,000 | 32.2% | 33.2% | 20.3% |
| All U.S. households | 135.0M | 77.0% | $88,390 | 42.0% | 44.7% | 32.1% |
Q3 tabulation of Federal Reserve SCF 2025 summary extract. Percentages are shares of all households in each age band; medians are among households with any debt. The all-household row reproduces the Fed’s published 77.0%, 42.0%, 44.7% and 32.1% holding rates.
The pattern is a slope, not a cliff. Between 65 and 79, each five-year step removes roughly 5 to 7 percentage points from the share in debt, and the 80+ group drops another 12 points, which is consistent with mortgages written in a household’s 40s and 50s reaching their final payments. Even so, nearly half of households over 80 still owe something.
For tax planning, the age gradient matters because debt service is a cash need that has to be funded from somewhere. A 67-year-old with a $59,000 balance and no other income source is often drawing more from a traditional IRA than the spending budget alone would suggest, and every one of those dollars is ordinary income on the 2026 federal brackets.
What percentage of retirees have mortgage debt?
About 39.8% of homeowners 65 and older carried debt secured by their primary residence in 2025, and 32.2% of all households in that age group did. Narrowing to homeowners aged 65 to 79, the share is 43.1%, up from 41.1% in the 2022 survey on the same definition.
Among households 65 and older that do owe on their home, the median balance is $114,000 and the median scheduled mortgage payment works out to $14,400 a year. That balance is about 1.3 times the group’s median household income of $85,200, and for 59.6% of senior mortgage holders the mortgage exceeds a full year of income. These households are not underwater, though: their median home equity is $275,000, and the median loan-to-value ratio among them is about 27%.
Home equity lines are a meaningful slice of this debt. Of mortgage holders 65 and older, 14.5% carry a HELOC, which typically has a variable rate. Retirees weighing home equity as a source of cash sometimes compare a HELOC with a reverse mortgage; the tax treatment of the latter is covered in is reverse mortgage income taxable.
One misconception worth correcting: carrying the mortgage for the tax deduction rarely pays off at this stage. Interest on $114,000 at a hypothetical 5% rate is about $5,700 a year, while a single filer 65 or older has a 2026 standard deduction of $18,150 ($16,100 plus the $2,050 additional amount in Rev. Proc. 2025-32). Unless other itemized deductions close that gap, the interest produces no federal tax benefit. Mortgage balances also figure into how retiree net worth breaks down by age.
Which debts do retirees carry besides a mortgage?
Credit cards are the most common non-housing debt: 33.2% of households 65 and older carried a balance in 2025, with a median of $2,800. Vehicle loans follow at 20.3%, other installment loans at 12.7%, and student loans at 3.5%, which includes some parents still repaying loans taken for children.
A sizable group carries consumer debt with no mortgage at all. In 2025, 28.5% of households 65 and older had debt but no home-secured debt, a share almost identical to 2022’s 29.7%. For these households the typical balances are small, but the rates are not: the IRS treats credit card interest as personal interest that is generally not deductible (IRS Topic 505).
The SCF summary data do not isolate medical debt; unpaid medical bills on a card appear as card debt, and those owed directly to a provider fall into smaller categories. Readers who see headlines claiming nearly all retirement-age adults hold “nonmortgage debt” should note those figures usually come from credit report files that count any open account, not balances actually carried, which is why the survey shares here are much lower.
Do working seniors carry more debt than retired ones?
Yes, by a wide margin: 73.4% of households 65 and older whose head still works carry debt, against 56.4% of retired households in the same age range. The median debt among working debtors is $89,000, more than double the $37,000 median for retired debtors.
Part of the gap is mechanical. Working households are more likely to still have a mortgage (45.0% versus 27.8%) and a car loan (30.0% versus 16.9%), and their higher incomes support larger balances. Measured across all ages, households whose head is retired (or disabled and not working) carried debt in 59.0% of cases in 2025, with a median of $38,000 among debtors.
That last figure updates a number that circulates widely. A median of roughly $32,000 for retired debtors appears in several articles; it matches the 2022 survey in 2022 dollars. Restated in 2025 dollars, the 2022 figure is $35,100, so the 2025 median of $38,000 is a real increase of about 8%.
The work status split has a planning implication. A household that plans to retire at 67 with an $89,000 balance is about to swap a paycheck for portfolio withdrawals, so the debt payment migrates from wage income to IRA distributions, often in the same years when Roth conversions would otherwise fit.
Has retiree debt grown since the 2022 survey?
Modestly, and mostly among households 65 to 74. Comparing the two most recent surveys on a constant-dollar basis (both in 2025 dollars), the share of 65 to 74 households with any debt rose about 3 points and their median monthly debt payment rose about 25%.
| Measure (2025 dollars) | 65 to 74, 2022 | 65 to 74, 2025 | 75+, 2022 | 75+, 2025 |
|---|---|---|---|---|
| Any debt | 64.8% | 67.7% | 53.4% | 52.3% |
| Median debt among debtors | $49,200 | $53,950 | $39,400 | $33,000 |
| Mortgage or HELOC on home | 32.2% | 37.2% | 27.6% | 26.2% |
| Credit card balance | 33.9% | 37.8% | 29.8% | 27.6% |
| Median monthly debt payment (debtors) | $840 | $1,050 | $600 | $710 |
| Payments above 40% of income (debtors) | 9.8% | 10.0% | 8.4% | 14.3% |
| 60+ days late in past year (debtors) | 3.6% | 7.3% | 2.6% | 5.1% |
Q3 tabulation of Federal Reserve SCF 2022 and 2025 summary extracts; the Fed restates 2022 values in 2025 dollars. Roughly 500 to 870 sample families per cell, so changes of a few points may reflect sampling variation.
Two signals stand out. Households 65 to 74 are more likely to carry a mortgage than three years earlier (37.2% versus 32.2%), consistent with more people entering their late 60s with loans originated or refinanced in their 50s. And the share of debtors reporting a payment 60 or more days late roughly doubled in both age groups, from low bases.
The aggregate picture is stable: households 65 and older held 15.9% of all U.S. household debt in both surveys. The Fed reports that, across all families, the median debt payment-to-income ratio for debtors rose to 15.4% in 2025, back to its 2019 level, and the payment growth among older households fits that broader pattern.
How heavy is the debt burden for households 65 and older?
For most older debtors the burden is light relative to assets but meaningful relative to income. The median 65+ debtor owes about 0.64 times annual income, and the median ratio of debt to total assets is about 12%.
The strained tail is real, however. In 2025, 11.7% of debtors 65 and older spent more than 40% of their income on debt payments, the Fed’s marker for a high payment burden, and among debtors 75 and older the share was 14.3%. Most of these households are on fixed incomes, so a payment that large leaves little room for rising Medicare premiums or home repairs.
Debt does not change how Social Security is taxed: up to 85% of benefits can become taxable once provisional income passes $34,000 for single filers or $44,000 for joint filers (IRS Publication 915), regardless of what the money is spent on. What debt changes is how much a retiree has to withdraw, and larger IRA withdrawals raise provisional income. The interaction is explained in the Social Security tax torpedo guide.
Could most retirees pay off the mortgage from their retirement accounts?
No. Only 32.8% of households 65 and older with a mortgage have retirement account balances at least equal to the loan, and 46.9% hold no IRA, 401(k) or similar account at all. Among the 53.1% that do have an account, the median balance is $200,000.
Taxes shrink that figure further. If traditional balances are reduced by an assumed 22% for income tax, the share whose accounts could cover the mortgage falls to 29.3%. In other words, roughly seven in ten senior mortgage holders could not clear the loan from retirement savings even if they wanted to, and the remainder would pay a substantial tax bill to do so.
For households without retirement accounts, the mortgage is generally serviced from Social Security and pensions, and home equity is the main reserve. Balances by age for those who do hold accounts are broken down in retirement account balances by age, and the share who reach seven figures is in what percentage of people retire with $1 million.
What does paying off a mortgage with IRA money cost in 2026 taxes?
A lump-sum payoff from a traditional IRA is taxed as ordinary income in the year withdrawn, so the bracket, the Social Security inclusion and the senior deduction phase-out all move at once. The route-by-route rules for 401(k) loans and withdrawals are covered in using a 401(k) to pay off debt; the example below isolates the 2026 tax mechanics for a typical senior balance.
Hypothetical illustration. A single filer, age 72 in 2026, receives $30,000 of Social Security and withdraws $40,000 a year from a traditional IRA. Baseline: $22,350 of benefits are taxable, AGI is $62,350, deductions total $24,150 ($16,100 standard, $2,050 additional for age, and the full $6,000 senior deduction), and federal tax is $4,336. The filer owes $114,000, the 2025 SCF median for senior mortgage holders.
| Approach | Extra IRA withdrawal per year | AGI per year | Senior deduction | Extra federal tax per year | Extra federal tax, total |
|---|---|---|---|---|---|
| Keep the mortgage | $0 | $62,350 | $6,000 | $0 | $0 |
| Pay off in one year | $149,508 | $215,008 | $0 | $35,508 | $35,508 |
| Spread over 3 years | $48,706 | $114,206 | $3,648 | $10,706 | $32,118 |
| Spread over 4 years | $36,317 | $101,817 | $4,391 | $7,817 | $31,268 |
Federal only, 2026 rules applied in every year for comparability; computed from IRS 2026 inflation adjustments. Ignores state tax, interest paid during a spread, and investment returns.
Three effects drive the gap. The one-year payoff loses the entire $6,000 senior deduction, which phases out by 6% of MAGI above $75,000 for single filers (IRS; IRC section 151(d)(5)(C)). It pushes taxable income to $196,858, near the $201,775 top of the 24% bracket. And it sets 2028 Medicare premiums from 2026 income: for 2026 itself, the first surcharge tier starts above $109,000 single and lifts the Part B premium from $202.90 to $284.10 a month (CMS).
The three-year spread still lands $5,206 above that first IRMAA threshold each year, while the four-year spread stays under it. Note that the senior deduction is scheduled to end after 2028, so a four-year schedule starting in 2026 would have less deduction in its final year. The tier structure is laid out in Medicare IRMAA in 2026, and the phase-out interaction in Roth conversions and the senior deduction phase-out.
How does carrying debt fit with a Roth conversion plan?
Debt payoffs and Roth conversions compete for the same bracket space, because both add ordinary income. A retiree who draws $48,706 a year for a three-year payoff has used most of the room a conversion would have filled below the IRMAA threshold. Housing choices tie into the same plan, as the data on where retirees are moving shows.
The sequencing can also run the other way. Qualified Roth distributions do not raise AGI or provisional income, so a household that converted in earlier low-bracket years has a tax-free source for a later lump-sum need such as a roof, a car or a remaining mortgage balance. Retirees with a mortgage that ends within a few years sometimes model whether the freed-up cash flow, once the loan is gone, can fund the tax on conversions; the funding options are compared in how to pay Roth conversion taxes.
RMD timing adds pressure. Households born 1951 to 1959 begin required distributions at 73, and those born 1960 or later at 75; the years between retirement and RMD age are often the lowest-income years available for either a conversion or a debt payoff. A financial professional can model both against the brackets, IRMAA tiers and senior deduction in the same projection.
Frequently Asked Questions
Do most retirees have their mortgage paid off?
Yes. In the 2025 Survey of Consumer Finances, about 60% of homeowners 65 and older owned their home with no mortgage or home equity debt. The remaining 39.8% still owed on their primary residence, with a median balance of $114,000.
What percentage of retirees are mortgage free?
About 48.7% of all households 65 and older own a home with no debt secured by it, and another 19.1% rent or do not own a home. Among homeowners alone, roughly 60% are mortgage free, rising to about 72% for homeowners 80 and older.
Do most people still have a mortgage when they retire?
Not most, but a large minority. Among homeowners 65 to 69, 46.2% still had a mortgage or home equity line in 2025, compared with 65.2% of homeowners aged 55 to 64. The share falls to 28.4% for homeowners 80 and older.
What is the average debt for a retiree?
The mean debt among households 65 and older with any debt was about $120,900 in 2025, but the median was $47,000. The mean is pulled up by a minority with large mortgages, so the median is the better guide to a typical household. Across all 65+ households, including those with no debt, the mean was about $73,500.
How much credit card debt do retirees have?
One in three households 65 and older carried a credit card balance after their last payment in 2025. Among those households the median balance was $2,800, and it was $2,500 for households 75 and older.
Is it bad to retire with a mortgage?
It depends on the rate, the payment relative to income, and how the payments are funded. About 11.7% of debtors 65 and older spend more than 40% of income on debt payments, a high burden, while many others carry low fixed-rate loans comfortably. Paying off a loan with a large traditional IRA withdrawal can raise taxes and Medicare premiums, so the funding source matters as much as the balance.
Can credit card companies take Social Security benefits?
Generally no. Section 207 of the Social Security Act (42 U.S.C. 407) shields benefits from garnishment by private creditors such as card issuers. Exceptions include federal tax debts, certain other federal debts, and court-ordered child support or alimony. Retirement accounts have their own protections, covered in are retirement accounts protected from creditors.
Methodology: Figures labeled “Q3 tabulation” are Q3 Advisors calculations from the Federal Reserve’s 2025 and 2022 Survey of Consumer Finances public summary extracts (scfp2025excel.zip, scfp2022excel.zip), pooling all five implicates and weighting by the survey weight WGT, in 2025 dollars as published. Age is the age of the SCF reference person. Debt uses the Fed’s DEBT variable (home-secured debt, other residential debt, lines of credit, credit card balances after the last payment, installment loans and other debt); mortgage means MRTHEL, debt on the primary residence including HELOCs; retirement accounts use RETQLIQ; retired households use OCCAT1 = 3; payment ratios use PIRTOTAL and PIR40, per the SCF variable definitions. The tabulation reproduces the Fed’s published all-family holding rates for any debt, home-secured debt, credit cards and vehicle loans. Medians pool implicates and can differ slightly from Fed figures that average across implicates. Five-year age bands rest on roughly 250 to 420 sample families each. The worked example is hypothetical, federal only, and uses IRS 2026 figures. Because this is a financial topic, anonymous forum anecdotes and unsourced secondary statistics were excluded.
This article is for educational purposes only and is not individualized investment, tax, or legal advice. Consult a qualified professional about your specific situation.
