Older Families’ Debt Levels Have Increased Since 1998

Sixty-eight percent of families where the head of the household is 55 or older carried debt in 2016, up from 53.0% in 1998, the Employee Benefit Research Institute (EBRI) found.

In 2016, 77.1% of families with heads ages 55 to 64 held debt, compared to 70.1% of those with heads ages 65 to 74 and 49.8% of those with heads ages 75 or older.

However, EBRI found that the average total debt decreased from $82,968 in 2010 to $76,679 in 2016, and the median debt level also decreased, from $61,219 to $47,800. EBRI also learned that families with younger or more educated family heads, higher incomes and higher net worth carried significantly higher average and median debt levels.

Debt for families with heads ages 75 or older increased from $30,288 in 2010 to $36,757, while those with heads ages 65 to 74 decreased from $78,319 to $65,686. Between 1992 and 2001, debt payments were approximately 9% of family income, but by 2010, they had increased to 11.2%. However, by 2013, that had declined to 10.0%, and by 2016, 8.2%. The older the family heads were, the lower the debt payments were as a percentage of income. For families with heads 55 to 64, that was 9.1%. for families with heads 65 to 64, 7.9%, and for families with heads 75 and older, 6.0%.

Families in the lowest income quartile were paying 16.4% of their income in debt payments in 2016, whereas families in the highest income quartile were paying only 6.2%.

The share of income that went to housing debt payments increased from 5.5% in 2001 to 8.3% in 2010, but then declined to 7.0% in 2013 and 5.7% in 2016.

Debt as a percentage of total assets for elderly (those with heads of household ages 65 and older) or near-elderly (those with heads of household ages 55 to 64) remained unchanged at 7.0% between 1992 and 1998, but declined to 6.5% in 2016.

The percentage of families headed by individuals younger than 55 with debt was 84.4% in 2016. EBRI says it appears that the percentage of families with debt peaks for those with family heads ages 35 to 54 and then tends downward for families with substantially older heads.

In conclusion, EBRI said that housing debt has been the main driver of debt for families with heads age 55 or older, while nonhousing debt has been relatively constant since 2001. In fact, the median amount of credit card debt with households headed by someone age 55 or older was $2,578 in 2013, and $2,500 in 2016.

However, American families just reaching retirement or newly retired are more likely to have debt—and higher levels of debt—than past generations. Consequently, EBRI says, more families that have elderly heads are placing themselves at risk of running short of money in retirement due to their increased likelihood of holding debt while in retirement.

EBRI’s full report, “Debt of the Elderly and Near Elderly, 1992-2016,” can be downloaded here.