Retirement Retirement Planning

Kevin O’Leary Has a Blunt Warning About the One Habit Sabotaging Americans’ Retirement Savings

This could unfortunately put your retirement in jeopardy.

By Catherine Collins , Edited by Laura Hohenstein

Updated Oct. 12, 2026

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Kevin O'Leary, the well-known entrepreneur and star of the hit TV show Shark Tank, has strong opinions about Americans' savings habits. Specifically, he frequently writes that Americans are not saving enough for retirement.

One of the main reasons Americans are not prepared for retirement, O'Leary says, is that they carry high-interest debt. This prevents them from saving enough in their retirement plans.

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O'Leary warns about the dangers of high-interest debt

High-interest debt predominantly includes credit card debt. According to Federal Reserve data, the average credit card interest rate is just under 21%. At that rate, it becomes difficult for Americans to pay off their debt.

O'Leary believes high-interest debt is one of the main reasons so many Americans are unprepared to fully fund their retirement years. He says, "if you are heading toward retirement with debt, now's the time to budget like you've never budgeted before."

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Why high-interest debt is especially dangerous in retirement

Although high-interest debt can damage anyone's finances, it can be especially harmful for people in retirement. That's because the average retiree has moved from a salaried income to a fixed income.

High interest rates can make a minimum payment grow over time, cutting into the cash flow retirees need to pay for basic living expenses. Additionally, retirees have many expenses, including health care bills.

Health care expenses are on the rise for retirees

Health care expenses are higher than people realize. According to Fidelity, retirees who are age 65 and older will pay, on average, $185,500 in health care costs. These health care expenses alone can derail many people's retirement budgets.

However, layering high-interest debt on top of that can make it challenging for retirees to pay their bills on time. That's why O'Leary considers high-interest debt incredibly damaging to people's livelihoods.

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How to break the debt cycle, even if you're retired

O'Leary recommends that people build an emergency fund with three to six months of expenses. An emergency fund can help insulate people from unexpected bills.

When you have a savings account to pay for an emergency home maintenance expense or a hospitalization, it prevents you from plunging further into credit card debt. For that reason, a robust emergency fund is one of the best ways to protect yourself from the high-interest debt trap.

The retirement account O'Leary recommends

If you're still a few years away from retirement, O'Leary recommends opening a Roth IRA. Many financial experts like O'Leary prefer Roth IRAs because you contribute after-tax income.

While this doesn't lower your taxable income in the present year, it lets you withdraw money tax-free in retirement, as long as you meet certain requirements. That way, you can take out money in retirement without worrying about it increasing your income, which can lead to other expenses like higher Medicare premiums in your golden years.

Social Security may not be enough for most retirees

For those who want to retire in the future and don't have emergency savings, a 401(k), or a Roth IRA, O'Leary warns that Social Security may not be enough to retire on. One mistake people make is thinking they'll have enough for retirement simply because they can catch up later or because they'll have Social Security. However, the Social Security Administration reports that the average Social Security check is just over $2,000 a month.

For retirees who still have to pay rent or a mortgage payment, that is likely not enough to pay for most household expenses. Even retirees with a spouse who also receives Social Security may find the average Social Security payment isn't enough to cover important household expenses, taxes, property taxes, and rising health care costs as they age.

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Paying off high-interest debt comes down to discipline

O'Leary has said many times that paying off high-interest debt takes time and discipline. In fact, he says discipline is one of the most important qualities for building wealth in the future.

O'Leary says that many people fall into the trap of overspending and inflating their lifestyle. He believes that taking the time and having the discipline to pay down high-interest debt is one of the most important steps people can take to build a strong financial foundation.

Being debt-free can help Americans invest more

Ultimately, O'Leary encourages people to pay down high-interest debt so they can redirect available cash flow to investing in their 401(k) and Roth IRA accounts.

Paying only the minimum payment on high-interest credit cards makes it hard to pay off debt completely. By staying disciplined, curbing spending, living on a budget, and paying down debt aggressively, people can potentially free up more cash flow to invest in their futures.

Bottom line

For retirees who want to free up their retirement budget, one big step to take is to pay down high-interest debt. For those who are not yet at retirement age but worry about having enough money to retire comfortably, paying down high-interest debt is a big step toward freeing up cash flow and allocating more toward investing for your future.

Many people find O'Leary's advice too direct or harsh, but his goal is to encourage people to build wealth primarily through financial discipline.

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