Debt-to-income was designed for people still earning
It asks whether next month's paycheque covers the repayment. After 60 there is no paycheque, you're not accumulating anymore, and the question changes completely: can your assets, your guaranteed income and your liquidity carry this debt for the rest of your life — including the years when spending rises and markets don't cooperate?
Sustainability score
Why the traditional ratio misleads you here
How long the debt is covered
Debt service against income that can't fall
Verdict
Making sense of this one
The standard measure of "can I afford this debt" stops working the day you stop earning.
Why debt-to-income misleads after 60
Debt-to-income compares your repayments to your income and asks whether next month works. It was built for people in their working years, and it carries a hidden assumption: that if things get tight, you can earn more. Take on overtime, change jobs, wait for a pay rise.
After 60 that assumption is gone. Your income is largely fixed, and the levers left are spending less or selling something. Meanwhile the picture has changed in your favour in other ways — you probably have substantial assets, which the ratio ignores entirely.
So the same ratio means something completely different. A retiree at 40% debt-to-income with $800,000 of investments is in a very different position from a 35-year-old with the same ratio and no savings — and conventional lending rules can't tell them apart.
Trevor has $140,000 in cash, $620,000 invested, and a $700,000 home. His guaranteed income is $34,000, of which 70% is indexed. He owes $185,000 on the mortgage at $1,520 a month, plus $22,000 of other debt at $520 a month.
His debt-to-income ratio is about 58% — well outside conventional lending limits. A lender looking only at that number would decline him.
But his debt is only 27% of his investable assets, and those assets carry both the debt and his spending for the full 27 years. The measure that matters most — debt service against income markets can't touch — comes out at 72%, which is genuinely high.
The most useful finding isn't the score of 60. It's that $22,000 of consumer debt is costing him $6,240 a year — the cheapest thing on the page to fix, and the most expensive to leave. That single change does more for his position than anything he could do with the mortgage.
The measures that actually matter
- Service against guaranteed income. How much of the money markets can't touch is already committed. Under 30% is comfortable.
- Debt against investable assets. Your home supports the balance sheet and pays none of the bills, so it doesn't count here. Under 40% is comfortable.
- Years of coverage. The only measure that accounts for longevity, inflation and spending together. It should reach your full horizon.
- How much of your income is indexed. Easy to overlook and genuinely important. A fixed pension against a fixed repayment sounds matched, but everything else you buy keeps rising.
A note on the chart
The "debt outstanding" line uses a simplified assumption about how much of each payment reduces the balance, so treat it as indicative rather than exact. The assets and income lines are calculated properly year by year.
General information only — not financial advice. This scores affordability, not eligibility: lenders apply their own rules, and most assess retirement income far more conservatively than this does. Debt secured against your home carries the risk of losing it, which no score captures. If any debt here is at a variable rate, the payment figures are a snapshot rather than a commitment, and a repricing upward is exactly the scenario worth stress-testing.