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Sounding the Alarm on Older Adults' Debt

Those 50-plus have higher unpaid bills than prior generations

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American families just reaching retirement or those newly retired are more likely to have debt, the new brief found.

As they head toward older-adult status, millions of workers focus on saving for retirement. But on the other side of the ledger is debt, and a new brief suggests that older adults owe more than previous generations, imperiling their economic status.

The Employee Benefit Research Institute (EBRI) has published an issue brief, "Debt of the Elderly and Near Elderly 1992–2016," that outlines the extent of debt-to-asset difficulties among those 55 and older. In the brief, EBRI's Craig Copeland came to the following conclusions:

  • “A higher percentage of American families with heads ages 55 or older have debt, and families with the oldest heads are seeing the greatest increases,” he wrote. “In 1992, 53.8 percent of families with heads ages 55 or older had debt and by 2010, 63.4 percent did so.” That number increased to 68 percent in 2016.
  • While the number of people affected is up, average debt levels have gone down since 2010 for households headed by a 55-or-older adult, from $82,968 to $76,679 in 2016.
  • Housing debt payments “have been 1 to 3 times larger than those of nonhousing debt payments since 1992.”
  • Families with heads ages 55-64 “have been more likely to have debt payments in excess of 40 percent of income than any other age group.”
  • “While improving in many respects … the overall trends in debt are troubling as far as retirement preparedness is concerned … American families just reaching retirement or those newly retired are more likely to have debt — and higher levels of debt — than past generations, specifically those in the 1990s.”

As a consequence of these developments, Copeland observed, “more families that have elderly heads are placing themselves at risk of running short of money in retirement.”

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