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Financial Planning > College Planning > Student Loan Debt

60 years old and deeper in debt

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Researchers at the Urban Institute found that Americans in their 60s now carry a heavier debt tally than their counterparts more than a decade earlier. In 1998, debt-burdened 60-somethings made up just under half of that age cohort. In 2010, that percentage had grown to nearly two out of three. As a share of their assets, their debt leaped during the same period from 10 percent to 18 percent.

These findings came to light in the “Squared Away Blog” on the Center for Retirement Research at Boston College’s website. Funding for the research came from a grant from the U.S. Social Security Administration through the Retirement Research Consortium of which the center is a member.

Income apparently had minimal impact on the debt load, with Americans of all income levels owing more. For those with incomes that placed in the top third, the share of older Americans in debt rose 13 percentage points from 57 percent to 70 percent between 1998 and 2010. During the same period, that share climbed by 17 percentage points for middle-income Americans and 14 percentage points for low-income people. For all three groups the amount owed also increased.

The blog’s author, Kimberly Blanton, points to mortgage debt as the primary factor behind this uptick in debt. Many older Americans have a mortgage, are paying them off slower, and perhaps have traded up to a pricier home with a heftier mortgage.

These findings could influence when baby boomers decide to retire. According to the researchers at the Urban Institute, debt-encumbered Americans between the ages of 62 and 69 are more likely to delay retirement and take Social Security benefits later.

But Blanton notes there are some positives in this trend. Many boomers with thriving careers are opting to work longer. Therefore, 60-somethings with debt now doesn’t necessarily mean they will enter retirement weighed down by IOUs.

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