Debt Levels Increase for Elderly

February 21, 2013 ( American families headed by individuals age 75 and older increased their debt levels from 2007 to 2010.

These families have increases in the incidence of debt, the average amount of debt held and the percentage with debt payments greater than 40% of their income in 2010, according to research by the Employee Benefit Research Institute (EBRI). 

For families with head of households age 75 or older, the average debt level increased from $13,665 in 2007 to $27,409 in 2010, and the percentage of these families having debt increased from about 31% in 2007 to almost 39% percent in 2010.

In contrast, families headed by those with ages just before normal retirement age (55 to 64) and just after (65 to 74) had very small changes in debt levels, in some cases, they saw improvements. The average debt of all of those headed by individuals 55 and older stood at $75,082 in 2010, up more than $1,300 (in 2010 dollars) from 2007. However, the families found to have the highest levels of debt were those with heads ages 55 to 64, those most likely to still be working. Among those families with heads age 55 to 64, the average debt level was $107,060 in 2010, down from $112,075 in 2007.

The EBRI analysis notes that the driver of debt for families with a head of household age 55 or older was housing debt, which accounts for almost three-fourths of their debt payments.

“These debt results are troubling as far as future retirement preparedness is concerned, in that the data indicate that American families approaching retirement or newly retired are more likely to have debt—and higher levels of debt—than past generations,” said Craig Copeland, senior research associate at EBRI and author of “Debt of the Elderly and Near Elderly, 1992-2010.”

“Older families that have taken on higher housing debt may well eventually have difficulty avoiding a major lifestyle change in living standards in retirement, certainly if they are planning to rely on their home as an income-producing asset,” said Copeland.

For all American families with heads of household age 55 or older, the percentage with debt held steady from 2007 to 2010, at roughly 63%. Furthermore, those with debt payments greater than 40% of income—a traditional threshold measure of debt load trouble—dropped to 8.5% in 2010 from almost 10% in 2007. However, debt payments as a share of income was virtually unchanged (from 10.8% in 2007 to more than 11% in 2010), while debt as a percentage of assets trended upward (from 7.4% in 2007 to 8.5 % in 2010).

EBRI’s analysis is published in the February EBRI Notes, “Debt of the Elderly and Near Elderly, 1992‒2010,” using the Federal Reserve Board’s Survey of Consumer Finances (SCF). This study also analyzes American families, defining the “near elderly” as those ages 55 to 64 and “elderly” as those 65 and above. The SCF examines debt payments relative to income and debt relative to assets. The report is available online at