NU Online News Service, April 25, 2003, 5:59 p.m. EDT – Mortgage debt could hurt the efforts of many members of Generation X to save for retirement, according to data gathered by the U.S. General Accounting Office.
The GAO prepared a report for the House Employer-Employee Relations Subcommittee that compares the current and future well-being of households headed by members of the “pre-baby boom” generation born between 1925 and 1945; the “baby boom” generation” born between 1946 and 1964; and the “Generation X” generation born between 1965 and 1976.
The researchers tried to “compare apples with apples” by looking at data for each generation in years when the heads were between the ages of 25 and 34. The researchers tried to account for inflation by expressing all dollar values in terms of 1998 dollars.
The results show that “overall debt levels increase across the generations,” writes Barbara Bovbjerg, the GAO director who led the team that produced the report. “Those households that go into debt are going into debt more deeply with each generation.”
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For households headed by members of Generation X, the increase in debt levels “was due largely to increases in housing debt,” Bovbjerg writes.
GAO researchers found that 46% of Generation X households with heads between the ages of 25 and 34 had retirement assets in 1998, compared with only 3.1% of pre-boom households in 1962 and 20% of boomer households in 1983.
The GenX households with retirement accounts had about $5,000 in retirement assets, more than twice as much as the comparable pre-boom and boomer households.
The researchers also found that 46% of GenX households owned homes in 1998, and those homes had a median value of about $83,000.