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Debt Consolidation

Why High Earners Over 50 Are Consolidating Debt Before Retirement

Written by Lauren Hamer, CFEI®
Senior Content Writer
November 20, 2025 | 7 min read
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You’ve reached your peak earning years, but even with a high income, you aren’t immune to financial pressure heading into retirement. Mortgages, your children’s tuition, and other obligations can strain cash flow, prompting many professionals over 50 to rely on credit cards or loans to keep pace.

Consolidating debt before retirement is a smart way to take control: it can lower interest costs, simplify repayment, and free up cash flow—giving you the breathing room to focus on what matters most in your next chapter.

The retirement debt dilemma—even for high earners

 

Debt after 50 is more common than you think

Carrying debt into your 50s or 60s isn’t unusual—even for those making six figures.  Americans in their 50s carry an average of more than $97,300 in debt.

This figure includes everything from mortgages and home equity lines to credit cards and even lingering student debt. For high-income professionals, that total can easily be higher due to investments or other substantial financial obligations.

Having debt at this stage of life doesn’t signal poor planning. More accurately, it often reflects a lifetime of investing in your career, your family, and your future.

 

Rising expenses, delayed milestones, and big goals

Many professionals over 50 are part of the sandwich generation: helping adult children through college, supporting aging parents, and maintaining multiple properties—all while trying to ramp up retirement contributions.

These overlapping priorities often push major financial milestones later in life, leaving high earners juggling both short-term obligations and long-term goals. By their 40s and 50s, many professionals are earning more than at any other point in their careers, yet these peak earning years often feel the most financially demanding.

That’s why simplifying debt and improving cash flow through consolidation has become an important step toward regaining financial control before retirement.

 

The problem isn’t income—it’s interest

When cash flow tightens, many high-income professionals turn to credit cards and other forms of financing to bridge the gap—especially when most of their wealth is tied up in illiquid assets like investments, retirement accounts, or real estate. It’s a temporary fix that can quickly backfire if not managed responsibly.

A professional earning a six-figure salary could still lose significant ground if much of that income is used to service revolving debt with double-digit APRs. Even a few months of carrying balances can erode liquidity and delay financial independence. Over time, this reliance on high-interest credit can trap otherwise successful professionals in a cycle of expensive borrowing.

Why consolidating debt is a smart pre-retirement move

 

Streamline and reduce monthly payments

Debt consolidation simplifies your finances by combining multiple debts into one fixed-rate personal loan. For high-income borrowers, that often means trading several variable, high-interest balances for a single predictable payment—usually at a lower rate.

This consistency creates breathing room. Lower monthly obligations can help redirect cash flow toward retirement catch-up contributions or strategic investing. Even saving an extra $1,000 per month can make a six-figure difference over the final decade before retirement.

 

Save on interest and simplify planning

Consolidating debt with a fixed-rate personal loan can significantly reduce the total interest you pay compared to variable-rate credit cards.

For example, shifting $100,000 in combined debt from an average 24% interest rate to a fixed 12% could save more than $56,000 over a seven-year term. More importantly, predictable payments and a clear payoff date make planning easier as you approach retirement.

This streamlined structure is particularly valuable for financial planning over 50, when economic volatility and uncertainty around future cash flow can make high-interest debt even riskier.

 

Discover how much you could save

Advertised rates are subject to change without notice.

* Potential savings based off comparing repayment of a $100,000 balance over 7 years on both a credit card with a minimum monthly payment of $2,467 and APR of 23.99% (average consumer credit card APR per Investopedia as of 8/05/25), with the assumption no additional draws on the line are made during this time; and a BHG Personal Loan with a minimum monthly payment of $1,789 and minimum available APR for a 7-year term, which is 12.44% as of 10/24/2025 and includes an origination fee.

 

Improve cash flow to boost retirement contributions

The money you save by becoming debt free in your 50s can compound quickly, allowing you to optimize your remaining earning years. Consolidating high-interest obligations into one manageable monthly payment can unlock the liquidity to:

  • Maximize 401(k) or IRA contributions, including catch-up limits.
  • Build an HSA for future healthcare expenses.
  • Reinvest in income-generating assets such as real estate or brokerage accounts.

How BHG’s personal loan supports retirement prep for high earners

 

Tailored for high-income professionals with strong credit

Unlike traditional lenders, BHG Financial takes a comprehensive view of your financial picture—not just your credit score. That means your professional success, cash flow, and overall creditworthiness all factor into your offer.

BHG provides tailored debt solutions for high-income professionals that help simplify repayment and improve financial flexibility before retirement. Whether you’re consolidating high-interest credit cards, other personal loans, or medical debt, BHG offers a tailored approach that fits your financial goals.

 

Higher loan amounts, longer terms 

High earners often have complex finances and considerable debt. That’s why BHG provides unsecured personal loan amounts up to $250,0001 and repayment terms as long as 10 years1,2—among the most flexible in the industry.

These extended terms can significantly lower your monthly payments, giving you room to maintain contributions, preserve liquidity, and prepare for future milestones without financial strain.

 

Quick, confidential, and credit-safe

BHG’s concierge loan process is designed for busy professionals who value both efficiency and privacy:

  • No impact on your credit score to prequalify.3
  • Approval decisions in as little as 24 hours.4
  • Funds deposited in as few as five days.4

You’ll also work with a dedicated, U.S.-based loan specialist who helps ensure a smooth experience from application to funding.

Debt consolidation over 50: strategy, not sacrifice 

As retirement approaches, debt consolidation can shift your focus from managing payments to maximizing possibilities. Instead of feeling burdened by debt, you can feel in control of your next chapter.

  • Freeing up resources for what’s next: With lower monthly payments and reduced interest, you can redirect funds toward what matters most: travel, second careers, healthcare planning, or legacy-building.
  • Better debt profile = better retirement readiness: Consolidating high-interest balances can improve your credit utilization ratio, which may strengthen your credit score and overall borrowing power. A stronger credit profile gives you more options if you decide to refinance your home, buy investment property, or access future financing at a lower rate.
  • Emotional confidence going into retirement: Fewer bills, predictable payments, and a clear payoff timeline reduce mental load and financial stress.

Key questions for high earners nearing retirement 

 

Should you carry debt into retirement?

Most experts agree that carrying high-interest debt into retirement can make even modest balances feel heavy. When income slows and savings need to last, paying more than necessary in interest can quickly add up.

It’s important to have a plan to address outstanding debt in retirement, including setting a budget and prioritizing a responsible payoff solution. Consider the following questions. If you answer yes to any, debt consolidation could be a smart move.

  • Are you losing money to high APRs? Compare your current rate(s) to what you could secure through a fixed-rate consolidation loan. Getting an APR even just a few percentage points lower can translate to thousands of dollars saved for your future.
  • Could you be saving more if you consolidated? Ask yourself: what could you achieve with that extra cash each month? Make more contributions to your retirement accounts, build a bigger emergency fund, or capitalize on strategic investments? By aligning debt management with your retirement goals, consolidation becomes a way to regain control of your finances.

Final thought: Consolidate now, retire with confidence

Consolidating debt before retirement isn’t about cutting back—it’s about moving forward with clarity and control. By streamlining payments, reducing interest, and freeing up liquidity, high earners can make the most of their peak earning years while positioning for a smoother, more confident transition into retirement.

If you’re 50 and older and planning for retirement, explore how a BHG personal loan can streamline your debt, reduce interest, and help you save more. Prequalify in minutes, with no impact to your credit.3

Not all solutions, loan amounts, rates or terms are available in all states.

1 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

2 Personal Loan Repayment Example: A $59,755 personal loan with a 7-year term and an APR of 17.2% would require 84 monthly payments of $1,228.

3 There is no impact on your credit for applying. For personal loans, a complete credit history, which will appear as an inquiry on your credit report, will be performed upon acceptance and funding of the loan and may impact your credit.

4 This is not a guaranteed offer of credit and is subject to credit approval. 

Consumer loans funded by Pinnacle Bank, a Tennessee bank, or County Bank. Equal Housing Lenders. 

For California Residents: BHG Financial loans made or arranged pursuant to California Financing Law license - Number 603G493.

 

 

 

If you’re feeling weighed down by credit card debt, you’re not alone. High interest rates can feel like an uphill battle, making it easy to fall behind and tough to catch up. 

Understanding how to pay off credit card debt is the first step toward taking control of your debt and reclaiming your financial well-being. Here are a few practical strategies to eliminate credit card debt.

 

Key considerations

  • If you have a significant amount of high-interest debt and a good credit score, a debt consolidation loan can be a viable option for paying off credit card debt. For smaller debts, a balance transfer card could help you tackle debt faster.
  • If not consolidating or using a balance transfer card, set a goal and a budget for repayment; targeting one debt at a time using the snowball or avalanche method can help reduce your balances methodically.
  • Gradually exceed monthly minimum payments whenever possible to decrease your total interest over time. Even small extra payments can make a big difference in your credit card debt over the long term.

 

Why is credit card debt hard to pay off?

U.S. credit card balances have surpassed $1.21 trillion, according to the Federal Reserve, driven partially by high APRs.

Credit card debt is difficult to overcome. Even if you don’t make additional purchases, the interest compounds. Only paying the minimum each month means you will carry the debt from month to month, increasing your debt as you accumulate interest charges.

For example, if you’ve amassed $50,000 in credit card debt on a card with a 23% APR, you could pay up to $11,500 per year in interest. Without a plan in place to address the debt proactively, it can become a significant burden. 

To start, pay as much as you can toward the debt. Some common ways to do this effectively and consistently include using the debt snowball or debt avalanche method. 

 

What is the debt snowball method?

If you have balances on multiple cards, one of the best strategies to eliminate credit card debt is the snowball method. With the debt snowball method, you pay off the card with the smallest balance first before moving on to the next largest one.

This method is a good choice if you can’t afford to make large monthly payments but want to proactively chip away at your debt. Once you pay off a card, you'll redirect the funds you were using for that payment to your next card balance. You'll continue to do this until you’ve tackled each debt.

Here’s how it looks in action, using the following credit card balances as an example:
 

  • Credit card 1: A $5,500 balance and an APR of 16%
  • Credit card 2: A $2,000 balance and an APR of 20%
  • Credit card 3: A $10,000 balance and an APR of 23%

 

Using the snowball method, you’d focus on the second card on this list first because it has the lowest balance ($2,000). Once cleared, you’d move on to the next highest card balance ($5,500) before addressing the third card with a $10,000 balance. 

Remember to make minimum payments on all other cards in the meantime; missing any minimum payment can hurt your credit score.

 

What is the debt avalanche method?

Attacking debt using the debt avalanche method involves paying off the account with the highest interest rate first, regardless of the balance. It can take a while to make progress on —especially if the balance on that card is excessive—but you’ll save money on interest in the long run. 

The avalanche method may be a better strategy for you if you can confidently afford a bigger payment and want to pay less in interest while you work to become debt-free. 

Here’s how debt avalanche looks in action, using the same credit card balances from above as an example:
 

  • Credit card 1: A $5,500 balance and an APR of 16%
  • Credit card 2: A $2,000 balance and an APR of 20%
  • Credit card 3: A $10,000 balance and an APR of 23%

 

Using the avalanche method, you’d tackle the third card first because it has the highest APR (23%). You’d focus on the second card next—APR of 20%—even though it has a lower balance, before moving on to the first card with the lowest APR. 

Again, it’s important to focus on making every payment on time to protect your credit score and avoid tacking on additional late fees. It can take a while to knock out the first debt, so patience and consistency is key.

 

How can debt consolidation help? 

Consolidating personal credit card debt FAQs

Consolidating personal credit card debt can simplify your finances by combining multiple debts into a single monthly payment with more manageable interest rates. In the long run, this can save you from spending more money than you anticipated or previously agreed to on in-terest payments in the future.

Personal debt consolidation can impact your credit score differently depending on the method chosen. For example, applying for a new loan or credit card for consolidation may result in a temporary dip in your credit score due to inquiries, changes in credit utilization, and your his-tory using credit-based financial products. However, making timely payments on the consoli-dated debt can positively affect your credit score by demonstrating responsible financial man-agement.**

Yes, personal debt consolidation can be applied to various types of debt, including personal loans, medical bills, and student loans, in addition to credit card debt. Consolidating multiple debts into a single payment can streamline your repayment process and make it easier to man-age your finances overall.

With highly specialized financing options for accomplished professionals, BHG Financial offers personal loans up to $200K1 to use as you need them. With repayment terms that last up to 10 years,1,2 you can fully bring your financial plan to action by consolidating your personal debts into a simple and affordable monthly payment to help you achieve financial peace of mind sooner rather than later.

Our payment estimator can help you see your personalized estimate quickly, and our dedicated concierge service team can serve your needs every step of the way.

 

Debt consolidation involves combining multiple credit card debts into one new account or loan and using it to pay off your existing debts. In many cases, consolidation can save you money because the new product may come with a lower interest rate than the ones attached to your cards. Consolidating debt also simplifies the repayment process because you only need to manage one monthly payment.

Some of the most effective credit card consolidation strategies include using a debt consolidation loan or a balance transfer credit card. The best way to pay off credit card debt will depend on the amount of debt you have, your credit history, and your income level.

If you have a significant amount of high-interest debt and a respectable credit score, a lower-rate personal loan for debt consolidation can be a viable option. Debt consolidation loans, like the ones offered by BHG Financial, have flexible repayment terms1 that help keep your monthly payments low.

 

Do balance transfers help pay off debt faster?

Transferring your balance from one credit card to another can help you pay your debt faster, as long as the new card comes with a lower rate. If you transfer your balances to a new card with a lower APR, you can allocate a greater portion of your future payments to paying down the principal instead of the interest.

That said, there are a few things to know about the timing of balance transfer credit cards:

  • You can apply for a balance transfer card in a matter of minutes, but the actual transfer can take anywhere from a few days to several weeks, depending on the credit card company. During that time, you’ll still have to make any payments you owe to your original card company.
  • Make sure you understand how long the introductory rate lasts, whether there’s a transfer fee, and what the regular rate will be after the promotional period. Introductory rates typically run for a period of six to 18 months, and if you can’t pay off your balance in full, the new rate may be higher than the rate on your old card. 

If you worry it may take longer than the intro period to pay off your debt, consider transferring your balance to a debt consolidation loan. BHG offers fixed, affordable payments with terms up to 10 years.1,2 Plus, dedicated loan specialists provide a concierge loan experience, guiding you through the loan process. 

 

 

Balance transfer vs personal loan chart


Source: Bankrate, Investopedia - Accessed on 3/14/25
1 Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

 

How to pay off credit card debt FAQ

 

Should I pay off my credit card debt or save first?

It usually makes sense to pay off your debts before saving money, especially if you have high-interest debt. This is because the high interest rates on your accounts will often cost more than the money you can save. For this reason, any money you can afford to save is better allocated to paying off your high-interest debt so that it doesn’t continue to compound. 

 

How can negotiating with creditors reduce my debt?

If card issuers are willing to consider negotiating your credit card debt, you may be able to set up a payment plan, pay off the cards for less than what you owe, or agree to a forbearance. However, there are definite drawbacks to negotiation, as these solutions negatively impact your credit score.

 

Can I pay off credit card debt without hurting my credit score?

Absolutely! Any moves you make to pay your monthly balances on time can help build a solid payment history and, in turn, improve your credit score. Plus, reducing your credit card balances will lower your credit utilization ratio.

 

Are debt relief programs worth it?

Debt relief (debt settlement) programs offered by for-profit companies should be viewed as a last resort, and only after you’ve exhausted options for consolidation. Debt relief companies can fast-track getting out of debt, but they often charge high upfront fees, and the process could hurt your credit score. Watch for scams and make sure you understand the potential fees before handing over your finances to a debt relief company.

 

What if I can't afford minimum payments?

Many creditors are willing to work with you if you cannot afford to pay the monthly minimum payment. Call the company as soon as possible to see what you can work out. If getting a debt consolidation loan isn’t an option for securing a lower minimum payment, you can contact a credit counseling agency, which will help you organize a debt management plan to pay down your debts. Debt relief programs could be considered as a last resort, as they come with drawbacks and can charge exorbitant upfront fees.

 

How BHG can help you pay off debt faster

At BHG Financial, we believe financing should fit seamlessly into your life and goals. That’s why we offer personal loans tailored to your needs, with amounts up to $200,0001 and flexible terms of up to 10 years.1,2 Consolidate your high-interest debt with a BHG loan designed to help you move forward confidently. 
 
Plus, you’ll enjoy dedicated, U.S.-based concierge service that works around your schedule—because your time is valuable. Ready to see what’s possible? Use our quick and easy payment estimator to get your personalized loan estimate in just seconds.