Elderly African American couple trying to figure out their finances.

Debt Levels for Households Nearing Retirement Decreasing, But Still High Compared to Past Generations

By Craig Copeland, Senior Research Associate, Employee Benefit Research Institute

Are you approaching retirement age and still carrying debt, including credit card balances? Are you working to pay off your debt before you retire? 

Recent analysis of data from the Federal Reserve shows that while the current generation of individuals approaching retirement are making headway in reducing their debt, they are still are carrying more debt than earlier generations.

Evidence from the Federal Reserve Board’s Survey of Consumer Finances (SCF) paints a mixed picture of trends relating to debt levels of families with a “near elderly” head—those age 55 to 64. By many measures, the debt burden has improved for this demographic group since the Great Recession. At the same time, in many ways, this family cohort shows higher levels of indebtedness than families with older heads. Also, as with many of the families with elderly heads examined in the SCF, the families with a near-elderly head show a pattern of stubbornly higher indebtedness than in past generations—specifically those in the 1990s.

Debt Levels:

  • As with most families with elderly heads, the families with nearly elderly heads have experienced a decline in debt levels as a percent of their assets since 2010—from 10.7 percent to 8.4 percent.
  • Total debt payments to income levels of families with near elderly heads have been trending down since 2007 and are at their lowest levels in two decades (9.1 percent). However, this level is still higher than that of families with older heads, which range from 6 percent to 8.2 percent.
  • More than three-quarters of families with a nearly elderly head held debt in 2016 (77.1 percent). While this level represents a downward trend from 2007 when it was 81.7 percent, it remains higher than the proportion in 1992 (71.4 percent). The family head age cohort with the next highest percentage with debt were families with heads ages 65-74, where the percentage with debt ranged from 51.5 percent in 1992 to 70.1 percent in 2016.
  • The proportion of families near-elderly head with debt payments that are greater than forty percent of their income is also down substantially since 2007 (8.5 percent in 2016 versus 12.5 percent in 2007). However, this cohort is more likely to have debt payments in excess of 40 percent of income than any older family head cohort.

Credit Card Debt:

  • The percentage of families with heads age 55-64 that have credit card debt declined in 2016 to 41 percent, which is well below the peak level of 50 percent in 2007. This, however, remains higher than the proportion in 1992, which was 37 percent.
  • The median credit debt for families with heads age 55-64 decreased significantly in 2016 from $4,168 to 2007 to $2,800 in 2016. However, this is still higher than the 1992 level of $1,676, and the highest of any of the older family head cohorts.

“Research like this helps us understand the risks those nearing retirement run when it comes to retirement preparedness,” says EBRI President and CEO Lori Lucas. “It is ASEC’s mission to educate people on how to improve outcomes by managing debt levels so they have the ability to save for their long term financial security.”


Let America Saves help you save money so you can feel confident about your finances. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn't stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.

TAKE THE PLEDGE


@EBRI discusses the debt status of the generation approaching retirement, and how such trends help financial capability organizations serve their constituents >> http://bit.ly/2F79JkN @AmericaSaves

Tweet this now

Take the Pledge

I pledge to save money, reduce debt, and build wealth over time. I will encourage my family and friends to do the same

Take the America Saves Pledge

Tip of the Day

  • Written by Katie Bryan | November 26, 2013

    Let this be the year that you put an end to bringing in the New Year with financial guilt and stress.  http://ow.ly/rcJIn 

Saver Stories View all »

Taking Steps Toward Financial Fitness

Written by Tammy G. Bruzon | November 7, 2014

Nicky Vasquez learned about Virginia Saves when she attended her first class with Bank On Virginia Beach. The instructor shared how important it was to have a written savings goal, and the entire class joined Virginia Saves as the first step toward financial fitness.

Read more...

Starting and Continuing a Personal Finance Journey

Written by Sara Cooper | December 23, 2013

When Kiara Hardin, now a junior at Western Illinois University, became an intern with the Chicago Summer Business Institute during her sophomore year of high school, she began her personal finance journey. The program required participants to open a savings account.

Read more...

Getting Out of Debt

Written by Katie Bryan | October 28, 2013

In 2004, Tonya Shelton was facing financial ruin. Barely making more than minimum wage and having lost her home to an unexpected family crisis, Shelton and her family were forced to live in a rundown hotel.

Read more...

Receive Updates

Sign up for Texts

Written by Tammy G. Bruzon | July 15, 2014

Sign Up

Sign up for Emails

Written by Super User | September 16, 2013

Get Emails

Take the Pledge

Written by Super User | September 16, 2013

Start Saving