10 Warning Signs You’re in Financial Trouble if You’re Over 55

Financial troubles don’t necessarily disappear with age. In some cases, they may even increase.

Money woes can haunt you until you take active steps to change course so you can increase your financial stability.

Here are some of the warning signs that could indicate you are in financial trouble if you are over the age of 55. If any of the following apply to you, it’s time to take action so you can build wealth instead of wasting it.

The median net worth for a household headed by someone between the ages of 55 and 64 is $364,500, according to the Federal Reserve’s Survey of Consumer Finances.

If your net worth is lower than the median, you might be facing financial trouble.

Determine your net worth by adding up your assets — such as cash, stocks, and the equity in your home — and subtracting your liabilities, such as credit card debts and personal loans.

Investors ages 55 to 64 have a median 401(k) balance of $89,716, according to Vanguard. If your 401(k) balance is lower than $90,000, you are likely worse off than many of your peers.

Of course, you shouldn’t overlook other savings. For example, maybe you have saved a lot of money in an IRA in addition to your 401(k) account. Or perhaps you are counting on a pension.

In such instances, you might be doing OK financially even if your 401(k) balance is a little low.

As you near retirement, wiping debt from your balance sheet is important. During 2023, people ages 43 to 57 carried an average of $157,556 in debt, including mortgage debt, according to Experian.

If your debts add up to more than that amount at age 55, you might be in financial trouble.

If you want to right the ship, consider making debt repayment a top priority. Consider cutting costs elsewhere to pay off debts as soon as possible.

If you are sticking to the minimum payments on your credit cards, your credit card balance may grow over time due to notoriously sky-high interest rates.

Even if you are technically up to date on payments, it could take years to get out of credit card debt if you only make the minimum payments.

If possible, increase the amount you put toward your credit card balance each month to get out of debt faster

An emergency fund gives you some financial breathing room to weather whatever life throws your way. Most experts recommend tucking away at least three to six months’ worth of expenses in an emergency fund.

If you don’t have that much saved up, you might be closer to the financial edge than you think.

Medical care can quickly get expensive. If you don’t have health insurance, you are especially likely to face sky-high medical costs.

As you age, health insurance premiums tend to rise. According to the Centers for Disease Control and Prevention, 80.9% of uninsured adults aged 50 to 64 were uninsured due to high insurance premiums.

Student loan debt can stick around for decades. On average, student loan borrowers between the ages of 50 and 61 have a $47,660 student loan balance, according to Forbes.

If you are over the age of 55 and have more than $48,000 in student loan debt, this could be a serious financial warning sign.

Among those between the ages of 43 and 58, the average credit score is 709, according to Experian. If your credit score is below this mark, it could be a sign of financial distress.

You can get your credit score back on track by sticking with on-time monthly payments and lowering your overall debt burden.

If you are over age 55, you are fast approaching the traditional retirement age. Whether you want to work for years to come or plan to leave paid work behind soon, it’s important to have a retirement plan in place.

A retirement plan offers a way to ensure your finances are on the right track for your golden years. Without a plan, it’s difficult to know if you have enough for retirement or not.

If a lender has reviewed your finances and turned you down for a loan, you might be in a tough financial situation. Generally, lenders steer clear of borrowers with too much debt on their balance sheets.

Take a closer look at your finances to find potential issues. If you have too much debt, consider making it a goal to get out of debt ahead of schedule to free up space in your finances.

Taking the time to assess your finances is always a good idea. Once you better understand your financial situation, you can start making smart moves to build your net worth.

So, if you see your own situation reflected in the items on this list, now is the time to act.