Non-mortgage debt in the U.S. — $13.2 trillion and counting as of the fourth quarter, according to the Federal Reserve Bank of New York — is impairing Americans’ ability to save for retirement, LIMRA reported Wednesday.
As many as seven in 10 workers in a LIMRA survey said they held some type of non-mortgage debt, but only 31% of these were saving for retirement outside the workplace, compared with 69% of workers without non-mortgage debt.
LIMRA noted that non-mortgage debt included home equity loans, credit card debt, student loans and car loans.
Non-mortgage debt weighs most heavily on millennials, just 20% of whom reported saving for retirement outside where they worked. Gen Xers are not much better off, with 34% doing so.
In contrast, 55% of baby boomers with non-mortgage debt said they saved outside the workplace.
LIMRA suggested that their debt load caused millennials and Gen Xers to feel less motivated to accumulate non-workplace retirement savings.
Here’s how the three generations are preparing for retirement, according to other research.
The insidious effects of non-mortgage debt also influence workers’ attitude about debt, the LIMRA survey showed.