A new LIMRA Secure Retirement Institute study found that pre-retirees (55-64) and retirees (65-74) are carrying unprecedented amounts of student loan debt.
Secure Retirement Institute analyzed federal data on consumer finances and found that in 1989 education loans made up 4 percent of installment debt for pre-retirees. By 2013, the share of debt for student loans totaled 30 percent. Among retirees, education loans made up less than 1 percent in 1989 but grew to 15 percent by 2013. (See Charts.)
The data suggests that parents and grandparents have acquired more student loan debt to help their children and grandchildren. “For five years consumers have told us their top financial concern is having enough money for a comfortable retirement,” said Michael Ericson, analyst for LIMRA Secure Retirement Institute. “When someone takes on additional installment debt in their late working years or early retirement, they have less money available for retirement savings and monthly expenses which makes it harder to save enough to eventually replace their income.” (See Video)
The amount of debt for each group has also soared. In 1989 pre-retirees held an average of $600 in education loans and by 2013 that amount grew to nearly $8,000. The average education loan debt for retirees increased from $400 in 1989 to more than $2,300 in 2013.