Adults have more debt today.
Dreamstime / TNS
Adults are now approaching retirement and retiring with more debt than previous generations.
Americans aged 50 to 59 years old had $ 3.4 trillion in debt in the first quarter of 2021, twice as much as adjusted for inflation 20 years ago, according to data from the New York Fed Consumer Credit Panel and Equifax.
For people over 60 it was $ 3.6 trillion, more than three times the inflation rate of the first quarter of 2001. Much of that is mortgage debt.
The number of retired adults carrying a mortgage has doubled in the past 20 years, said Caezilia Loibl, professor of consumer science at Ohio State University in Columbus, Ohio.
Retired mortgage debt is associated with increased food insecurity and difficulty paying for drugs. “The ability to borrow against the equity in your home can be important later in life,” she said, because it “eases other financial burdens for an older couple.”
“Debt is a bad thing when you retire,” said Mike Riffel, private asset manager at Lucco Financial Partners in Highland, Illinois, about your expenses. This is something that will haunt you until it is repaid. “
How Much Debt is Too Much? One metric is your debt-to-income ratio, which measures how much of your gross monthly income is used in debt payments, said Jonathan Howard, financial planner at SeaCure Advisors in Lexington, Kentucky.