How to help clients balance debt and retirement savings

Americans are holding more debt than ever. Household debt in the U.S. has increased more than 50% in the last decade to exceed $18 trillion, according to the Q1 2026 Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York. This trend could pose a risk to their financial future, if not addressed.

Explain the risk of unchecked debt

Debt can hinder a client’s ability to save for retirement. The majority of Americans (62%) say they are not saving as much for retirement as they would like to, according to the 2026 Annual Retirement Study* from the Allianz Center for the Future of Retirement®. Debt from housing, credit cards, cars, and student loans are among some of the most common reasons Americans feel behind on their saving targets. Low savings today due to debt can mean less income in retirement tomorrow. Your clients need to understand the risk that debt can pose to their financial future.

Black Americans in particular worry about the effect of debt on their financial future. Nearly one in three (32%) of Black and African Americans identify needing to pay down accumulated debt as one of the greatest risks to their retirement income. One in five (20%) of all Americans said the same.

If debt is limiting your clients’ ability to save for retirement, they can miss out on compounding returns over time. With lower savings rates, they can be more vulnerable to risks that could deplete their savings faster than anticipated, such as inflation and increasing medical costs. At the same time, it can leave them with more limited options to fund their retirement lifestyle. Paying off debt can help lower monthly expenses, improve credit scores, and save on interest costs over time.

Questions to ask

When do you plan to retire?

How long your clients have until retirement is critical information. If they anticipate retiring in the near future, then increasing their retirement savings may be a top priority. A longer horizon until retirement gives more time to pay off debt and prepare for the future.

What type of debt do you carry?

Understanding the type of debt your clients carry will help you develop a strategy moving forward. It’s important to look at the various debts a client has and which ones will cost more over time. Paying off high-interest debt like credit card balances should often be prioritized.

What support does your employer offer?

Make sure your clients are maximizing the retirement benefits through their employer. If their savings are already limited, they can’t afford to leave benefits like an employer 401(k) match on the table. Some employers even offer programs to help employees pay off debts such as student loans and save for retirement at the same time.

 

Balancing debt with saving for the future

Many Black and African Americans say a lack of savings (52%) and needing to pay off debt (48%) are holding them back from feeling empowered to retire on their own terms. What’s more, Black and African Americans are more likely to say that developing a plan to help pay down debt was one of the most valuable things a financial professional could do for them.

This is where the guidance of a financial professional can help. You can help clients build a strategy that balances debt management with saving for retirement and other future financial needs. That strategy will detail how clients can manage debt payments, accumulate savings for retirement, and address various risks to retirement that could be impacted by debt.

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More from our 2026 Annual Retirement Study

Explore how financial professionals can help improve financial security for Black and African Americans by building culturally intelligent strategies that deepen understanding and better reflect clients' unique values and experiences.

*Allianz Center for the Future of Retirement® conducted the 2026 Annual Retirement Study in January 2026 with a nationally representative sample of 1,000 respondents age 25+ with an annual household income of $50K+/$75K+ (single/married) OR investable assets of $150K+. The study also included an additional sample of respondents who identified as Black/African American (400 responses); Hispanic (407 responses); Asian/Asian American (356 responses).

The Allianz Center for the Future of Retirement® produces insights and research as a part of Allianz Life Insurance Company of North America.

Allianz Life Insurance Company of North America (Allianz) does not provide financial planning services.

Products are issued by Allianz Life Insurance Company of North America. Registered index-linked annuities (RILAs) are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.542.5427 www.allianzlife.com

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