14 Ways to Get Out of Debt When You’re in Your 50s

Your golden years shouldn't be weighed down by debt.
Updated April 11, 2024
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Most people imagine their 50s will be a time to kick back, relax, and enjoy the fruits of their labor. But for many people approaching retirement, there’s nothing relaxing about life at 50 if they have a lot of debt.

According to data from the New York Federal Reserve Board, people between the ages of 50 and 59 have $86,994 in debt, which can make the idea of retirement and living on a fixed income an anxious prospect.

Paying off debt before you retire is crucial for a comfortable post-work life. Here are 14 ways you can get out of debt in your 50s.

If you have more than $10,000 in debt from credit cards, medical bills, collections, or personal loans, this company might be able to assist you in consolidating your debt into one low monthly payment.

Organize your debts

ty/Adobe senior businessman sitting on desk with bunch of papers at office

The first step to becoming debt free is to figure out how much you owe. Gather your current loans and monthly payments, credit card balances, and lines of credit. 

Write down the following information for each debt: lender, interest rate, total balance, and monthly payment. Then, figure out which debt you want to pay off first.

As a general rule, you should pay down the debts with the highest interest rates first, then tackle the next highest, and so on, until you’re debt free. 

Another option — the “snowball method” — is to pay off your smallest debt, then the next smallest. Some people prefer this method because seeing the number of debts going away can motivate them to stick with it.

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Downsize your house

MrnSailor/Adobe ai generated modern tiny home

A house is usually a person’s largest asset. But if your home is worth a lot and you’re in debt beyond the mortgage, consider selling it and buying or renting one that is less expensive. If you plan to downsize when you retire, why not do it now?

Any profit you make on your house should go toward paying off your other debts, especially credit cards. If you still have money left after paying your debts, you should invest that for your retirement.

Move to a cheaper city

SeanPavonePhoto/Adobe country road with oak trees in savannah, georgia

When downsizing your home won’t improve your financial situation, it may be time to consider moving to a more affordable location. If you live in an expensive city like New York City or San Francisco, a move to the suburbs might make sense. 

And if you can work remotely, moving to a state like Kansas or Georgia — among the top 10 states with the lowest cost of living — might be an option.

Find a side hustle

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Two ways to pay off debt are to spend less or earn more money. If you’ve already cut your expenses to the bone, the next step is to increase your income.

If you’re a working professional, see if you can consult or freelance on the side. Make a list of any other skills that you can monetize. There are dozens of ways to make extra money, from dog walking to delivering food. Any income you make should go directly to pay off debt.

Stop helping your kids

New Africa/Adobe senior woman sitting on chair with young girl hugging her from back at cafe

As a parent, giving your children money is tempting even if you're struggling. But just like a flight attendant reminds you to put your mask on first, you must fix your finances before bailing out your kids.

It may be unpleasant, but you must explain your financial situation to your children. Tell them you have to stop giving them money and clarify that this may be a permanent decision.

Transfer credit card debt

Ivan Traimak/Adobe senior business woman holding cup of coffee while working on laptop at work

Credit cards generally have the highest interest rates of any debt, so if you carry a balance on a card, consider transferring it to a new card with 0% APR.

This can help you pay off the debt faster because you’ll pay down the balance and not accrue interest charges. You might be able to save hundreds or thousands of dollars on interest.

Just be sure you understand the fees involved (usually $5 or 3% of the amount transferred), the length of the 0% interest period, whether or not the 0% applies to new purchases (it usually doesn't), and what the interest rate will be after the 0% period ends.

Your best move when you do a balance transfer is to use the new card only to pay off your debt and to pay it within the 0% period. Don't run up a balance on a new card.

Don’t ignore your debts

Andrii Zastrozhnov/Adobe senior woman sitting on table reviewing bill besides laptop and envelopes

Tackling a mountain of debt can seem impossible, especially if you’re dealing with personal problems like losing a spouse or reeling from a life-altering medical diagnosis. 

But the worst thing you can do is bury your head in the sand. Ignoring your debt could ruin your credit score or force you to deal with collection agencies.

If you can’t pay your bills, be proactive. Contact the creditor and work out a payment plan.

Postpone retirement

Grady R/peopleimages.com/Adobe senior business man sitting on table with junior colleagues at work

Once you hit your 50s, you may have an age in mind when you want to retire. But if you’re paying off debt, you might need to revisit that timeline.

Consider postponing retirement until you’re debt free. According to a Pew Research Center study, 77% of working people say they’ll probably continue to work for pay after retirement.

Working a few years longer could mean the difference between a comfortable retirement and a precarious financial life.

Review your car insurance

insta_photos/Adobe senior man using smartphone while standing besides open door of rv camping van

When you’re trying to save money to pay down debt, you may be eating out less often or using coupons at the grocery store. Those are good ways to save a little each week. But you may be able to save hundreds of dollars if you shop for new car insurance.

It’s easy just to pay the insurance bill every month or six months. Yet, if you compare coverage at several insurers, you may find a big difference. Once you have a lower quote, call your current insurer and ask if they’ll match the premium.

Negotiate medical debt

moodboard/Adobe broken hand of african american man in plaster with handle

If you owe medical debt to a hospital, there are several ways to manage it. Most hospitals have hardship payment plans for low-income people that may lower your costs.

Most medical providers will help you with a payment plan if you can’t cover the bill simultaneously. And many providers offer medical credit cards that will help you manage the payments over a specific period.

As with all kinds of debt, talking to the creditor about your situation before it gets out of hand is the best way to handle it.

Ask for a lower interest rate

insta_photos/Adobe businessman sitting at work desk talking on smartphone while using laptop at table in office

If you don't qualify for or don’t want to bother with a balance transfer, you can try to negotiate a lower interest rate from your credit card issuer. Call the credit card company and ask if they can offer you a lower interest rate.

Getting a better rate can speed up the debt payoff process and minimize the total interest paid. Do this for every card that you have a balance on.

Reduce your student loans

insta_photos/Adobe senior woman using tablet while leaning over kitchen countertop

Federal student loan consumers can access several repayment options to lower their monthly payments. Some 50-year-olds may qualify for loan forgiveness programs that can wipe out part or all of their remaining loans.

Borrowers with private loans may be able to refinance at a lower interest rate. This can reduce your monthly payment, freeing up more money to put toward other bills.

Don’t raid your retirement account

Drobot Dean/Adobe senior asian woman typing on laptop at table with glasses

Some think emptying their 401(k) or IRA to pay off debt makes sense. But you may end up paying a 10% early-withdrawal penalty and taxes. Plus, you won’t have enough money to cover your retirement.

Don’t touch your retirement account, no matter your debt.

Call your utility companies

JonoErasmus/Adobe senior man sitting besides window on sunny day talking on mobile phone

Utilities like electricity, water, cell phone, and internet service are part of everyday life. But the cost seems to keep rising. You may qualify for hardship programs from utilities if you're underemployed or unemployed.

For your cell phone carrier or ISP, set aside an afternoon to call them and negotiate a lower rate. Most companies would rather keep you, a current customer, than lose you to a competitor.

Bottom Line

Anela/peopleimages.com/Adobe senior business woman sitting at work desk posing for picture while holding glasses

Getting your financial house in order becomes even more critical when you have a few working years left. Paying off your debt should be as much of a priority as saving for retirement.

If you can’t find ways to crush your debt on your own, contact a non-profit credit counseling organization such as the National Foundation for Credit Counseling for help.

National Debt Relief Benefits

  • No upfront fees1
  • One-on-one evaluation with a debt counseling expert
  • For people with $7,500 in unsecured debts and up

Author Details

Zina Kumok Zina Kumok is a freelance personal finance writer specializing in student loans, credit, personal loans, mortgages, investing, and more. As a former newspaper reporter, she has covered murder trials, the Final Four, and everything in between. She also paid off $28,000 worth of student loans in three years.

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