Debt: The blind spot on America's road to retirement

Securian's multi-generational study shows Americans are struggling to balance today’s living with tomorrow’s security.

The greatest risk to financial security during retirement may be the debt consumers don’t see today.

A survey conducted for Securian Financial Group, Inc. by Mathew Greenwald & Associates, found that many Americans are not clear about what constitutes debt. Nearly half (46 percent) of consumers declined to classify at least one common financial obligation such as outstanding balances on credit cards or home-equity lines of credit, overdue utility bills – even “payday loans” from friends or family members – as debt. In fact, 11 percent of people with debt don’t consider themselves as being in debt.

Meantime, debt is preventing them from preparing for future financial security. Forty-three percent of non-retirees surveyed indicated debt would affect their ability to save for a comfortable retirement “a great deal,” and 32 percent of non-retirees who have debt said they cut back on their retirement savings as a result.

Retirees offered evidence that the debt concerns of working respondents were justified. More than half retired with non-mortgage debt, and about one in four (23 percent) said their debt equaled or surpassed their savings and investments at retirement time. Fifty-two percent of retirees reported that they carried non-mortgage debt into retirement.

“More than anything, this survey points to the need for consumers to head toward retirement with their eyes wide open,” said Kerry Geurkink, director, Annuity Marketing, Securian Financial Group. “Take a hard, honest look at your debt and how it’s affecting your ability to save for the future.  Resources such as financial advisors, debt counseling and other financial tools can help you assess your situation and find the right balance.”