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At what age should you have all your debt paid off? It depends on a few things

Get a jump-start on retirement by mapping out how long your debt payoff will take you.

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Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

The average American consumer has about $25,483 in debt apart from their mortgage, and the average homeowner carries a mortgage balance of $215,655. Twenty-somethings are often bogged down by student loan debt, 30-somethings find themselves taking on more credit card and mortgage debt. It's not all that surprising that consumers in their 30s and 40s — who are growing families, buying homes and generally facing more expenses — would have more debt.

But if taking on debt in your younger years is considered the status-quo, what's the best age to pay it off by?

The answer, CNBC Select found, depends on a few things.

Kevin O'Leary, an investor on "Shark Tank" and personal finance author, said in 2018 that the ideal age to be debt-free is 45. It's at this age, said O'Leary, that you enter the last half of your career and should therefore ramp up your retirement savings in order to ensure a comfortable life in your elderly years.

That's hard to do, he argued, if you're still paying down other balances.

While O'Leary's advice would certainly put you in a great position to retire by your mid-60s or sooner, the choice to pay off debt is nuanced, especially for homeowners (more on that below).

If you're carrying high-interest debt — such as credit card debt or an auto loan with an APR in the double-digits — it would make sense for you to follow O'Leary's advice and pay them off as soon as possible. Keeping a balance on a credit card can easily cost you thousands in interest and take you years to pay off unless you prioritize a plan of attack.

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That's no exaggeration: Take the Chase credit card statement below. With a 25.74% APR, it would take the cardholder 21 years to pay off a balance of $5,311.57 if they only paid the minimum. They would end up paying a total of $15,891 including interest.

CNBC Select

That money would be much better off earning a person compound interest in a retirement fund over the next 21 years, as opposed to paying credit card companies more in interest fees.

However, for credit products with lower interest rates, such as mortgages and even 0% APR car loans, every borrower must make the decision that works for their wallet and budget.

If your debt is costing you less than you expect to make in the stock market (based on your portfolio's asset allocation), a financial advisor may advise you that it's OK to make lower payments on debt and have more to invest in your retirement fund.

The latest data from the Federal Reserve shows that older consumers are carrying mortgages well into retirement, especially now that mortgage rates are at a historic low.

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Aside from the mathematical considerations, brokerage company Charles Schwab advises that consumers factor in peace of mind: "...weigh the value of having more money in the bank (or in your portfolio) versus being mortgage-free."

Consider what it would be like to still have a mortgage in retirement, when you potentially have a smaller income. Then you need to decide if that's something you can live with. Similarly, if owning your home outright and/or having an asset to pass on brings you comfort, keep that in mind as you make your decision.

Bottom line

Debt payoff is personal and depends on a multitude of factors. If you are juggling a few different types of lingering debt and retirement is on the horizon, consider reaching out to your financial planner or using free resources to map out how much your debt will cost you over time.

To get started, take time to figure out how your debt might be preventing you from achieving your retirement goals. Start by writing down how much debt you have and using a debt payoff calculator to see how long it could take you to pay it off.

Then take some time to calculate how much you want to save for retirement. Vanguard offers a retirement calculator that lets you input your current age, how much you can afford to save monthly for retirement and what your ideal retirement age is. See how much you'd need to save to reach your retirement goal and then consider how much your debt payoff plan might be holding you back.

If you've got high-interest credit cards that will take you years to pay off, consider a debt consolidation loan which might give you the opportunity to pay off the debt at a lower APR. SoFi offers personal loans up to $100,000 (depending on creditworthiness) to help people refinance credit card and other high-interest loans.

As for new debt? If taking on a loan today means you'll be stuck paying it off past age 45, do the math and consider whether financing will make your life more stressful or threaten to throw off your retirement plans. (That goes for any nonessential loans for new cars, large purchases, home renovations, etc.)

And if you already have a mortgage, don't fret if your APR is low. Just stay focused on saving as much as possible so you feel like you're taking the right steps toward this bigger, long-term goal.

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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.