Prioritizing paying off debt before retirement? These balances may need different treatment.

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October 7, 2026 / 1:29 PM EDT / CBS News

For many Americans approaching retirement, eliminating debt can feel like an obvious item to put near the top of the financial to-do list. After all, without a paycheck coming in, it can be tough to cover mortgage, credit card or other loan payments, as you'll need to fit those payments into a stricter budget reliant on Social Security, pension income or retirement withdrawals. The problem is, though, that debt remains a significant issue nationwide right now, so millions of Americans are still trying to get rid of their balances before entering retirement.

Borrowers nationwide held a collective $18.8 trillion in household debt in the second quarter of 2026, including $1.26 trillion in credit card balances and $1.71 trillion in auto loan debt. And if you're nearing retirement with one or more of these balances, the temptation may be to pay off as much as possible while employment income is still coming in. But simply aiming to enter retirement with a $0 debt balance overlooks an important part of the equation.

Original source: https://www.cbsnews.com/moneywatch/