When people carry a significant amount of credit card debt, virtually every area of their financial lives can be impacted. That includes how much money, if any, they’re saving for retirement.
The younger generation of adults, known as millennials, seems to have an overall aversion to credit card debt. In a recent study, one third said it was the most frightening thing in their lives — more than death or war.
Many people in their parents’ generation, however, are struggling with credit card debt. In a survey by Allianz Life, half of Generation Xers (those born in the 1960s and 1970s) said that they need to pay off their credit card debt before they can even begin saving for retirement.
Some other results from this study are concerning. Over two-thirds admitted to lacking confidence in their ability to manage their finances. However, nearly that many said that they were confident that they would somehow end up with enough money for retirement.
One executive with Allianz Life noted that “Generation X’s saving and spending habits were concerning, especially since retirement is not far off for many in this group.”
In addition to credit card debt, many GenXers are dealing with student loan debt. The average amount of non-mortgage debt for this group has risen by $3,000 (to $23,000) since 2014.
If your credit card debt is impacting your ability to pay for everyday expenses (or if you’re using credit cards to cover these expenses) and keeping you from saving money for retirement or even an emergency, it may be time to take a look at your options for getting out from under it.
Source: Planadvisor, “Credit Card Debt Preventing Many Gen Xers From Saving for Retirement,” Lee Barney, Nov. 29, 2017