Nearly two out of three people in their 60s have today are carrying debt, up from half of the same age group in 1998. The level of debt as a share of assets is also on the rise, at 18% versus 10% 15 years ago, according to research cited by the Center for Retirement research at Boston College.
Regardless of income level, the trend holds true, Center for Retirement Research writes, based on Urban Institute data presented at a recent Retirement Research Consortium.
In large part, the shift is due to mortgage debt being held by retirees. Older Americans are paying off mortgages more slowly than in the past, and mortgage balances have increased, write the BC researchers, in a blog post this week.
“One possible explanation for these trends is that many homeowners traded up during the housing boom and took on larger mortgages,” the Center for Retirement Research reports. “An unrelated study estimates that 17 percent of mortgage borrowers who are close to retirement age owe more than their house is worth.”
Additional factors may include people working longer into their 60s and beyond.
“Taken alone, the debt trend among older Americans is striking enough. But it may be having an impact on baby boomers’ decisions about when they will retire,” BC writes. “People in their 60s who owe money, particularly if they have a mortgage, are increasingly likely to retire or start collecting their Social Security benefits later, according to the Urban Institute’s research, which is believed to be the first to confirm a link between debt and these major life decisions.”
Written by Elizabeth Ecker