Why Boomers Should Pay Off Debt

Posted by: Gene M. | Feb 22,2008


There’s a basic conventional wisdom that Boomers stay in their jobs a lot longer than previous generations.  The time of retiring right when you hit 65, grab a gold watch, and hit the golf course, are long past.  Baby Boomers are a restless lot and as much as it’s nice to play golf, a number of Boomers actually like the prospect for staying in their jobs for longer.  There’s one simple reason for this: they like their jobs and they like working.  

Of course there are those who would like to retire yesterday, but that’s not everybody, and that is good news.  The longer you stay in your job, the more you’ll have to retire comfortably.  However, this is not the case with every Boomer facing retirement.  It’s not a case of loving the job, but out of pure financial necessity.  Baby Boomers have racked up a huge amount of credit card debt and the basic formula is: the more credit card debt you have, the longer you’re going to have to stay on the job to pay off that debt.  A simpler way of saying that: don’t expect to retire if you’ve got lingering unpaid debt.  

It’s a nice fantasy to think that Boomers on the whole are staying in their jobs because they adore working, but the reality for many Boomers is that they are staying on the job because they can’t afford not to.  If you’re a Boomer staring at credit card debt, this is absolutely something that you should not leave until after retirement.  Even low-interest credit card debt is a kind of leech on any retirement savings.  

If you’re independently wealthy with high-caliber investments, this doesn’t apply, but by and large most of those Boomers who are facing high debt and staying in their jobs to pay it off cannot afford the drain on retirement funds.  In any case, if you’ve spent years and years building up a quality investment portfolio, why do want this to be absorbed by credit card debt?  You don’t.  Every budding retiree should be looking to get out of debt as soon as possible, because high-interest credit card debt is going to be a drain on retirement accounts of any type.  

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