People in their 60s carrying more debt, usually a mortgage

Aug. 25, 2013 at 10:43 AM
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BOSTON, Aug. 25 (UPI) -- Nearly 2-of-3 U.S. adults in their 60s had debt in 2010, up from half of adults age 60 and older in 1998, a study found.

Researchers at the Urban Institute found this age group's debt, as a share of their assets, rose from from 10 percent in 1998 to 18 percent in 2010. In the past, those approaching retirement paid down debt and had paid off their mortgage. The findings were presented at The Center for Retirement Research at Boston College.

Among those ranked in the top-third by income, the share of older people in debt increased from 57 percent to 70 percent between 1998 and 2010 -- a 13 percentage point increase, the researchers said.

Mortgages were a major reason more older U.S. adults have debt. More have mortgages, in part because they're paying them off more slowly than they once did -- 30 years instead of 20 years.

In addition, mortgage balances increased.

The Urban Institute said one possible explanation for these trends in debt is that many homeowners traded up during the housing boom of the mid-2000s and took on larger mortgages.

An unrelated study estimated 17 percent of mortgage borrowers who are close to retirement age owe more than their house is worth, said the Center for Retirement Research at Boston College.

Other factors might also help explain what's driving the growing prevalence of debt in older Americans. More early baby boomers with thriving careers want to work longer -- so the great incidence of debt among households in their 60s doesn't always mean a higher incidence of retiree debt, the researchers said.

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, the Urban Institute found.

Topics: Older U.S.
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