Older adults generally carry less debt than younger ones, as people tend to abandon their debt as they approach and enter retirement. But in recent decades, each cohort of older people has more debt than the previous cohort.
“There is a group of elderly people in financial distress,” said Anna Maria Rusaldi, an economist at George Washington University. She said, “They are very well utilized. They have a lot of debt. They are contacted by debt collectors. They are not going to enjoy the golden age.”
Dr. Mudrazija and his co-author, Senior Researcher at the Institute, Barbara Butrica, used data from a national health and retirement survey, and in 1998 about 43% of Americans over the age of 55 were in debt. We have calculated that the median is $ 40,145. By 2016, about 57% were in debt, many with an inflation-adjusted median of $ 62,784.
Liability has risen to nearly 45% of total assets, and the ratio of liabilities to assets has nearly doubled to 15%, reaching 80%.
Elderly people with debt were more likely to encounter health problems, but the type of debt was important. the studyPublished by the Boston University Retirement Research Center.
Secured debt, such as mortgages and other mortgages, is backed by the asset of housing. Such debt increased among older borrowers as real estate prices soared and interest rates remained low. “The traditional model, repayment of mortgages before people retire, is becoming less common,” said Dr. Mudrajia.
However, secured debt appeared to be less harmful to health than unsecured debt, which normally imposes higher interest rates, such as credit card balances, student loans, and overdue medical costs. In 1998, about 24 percent of senior citizens’ debt was unsecured. By 2016, that percentage had risen to 35%.