Retirement Security Being Threatened By High Debt, Warns Researchers
The share of people over 75 making high debt payments compared to their income is the highest in a quarter of a century, EBRI found.
“(They) are placing themselves at risk of running short of money,” the researchers found.
They added while asset accumulation gets talked about the most in retirement planning more attention should be paid to debt which can eat away at nest eggs.
The outlook for Baby Boomers near retirement or who just retired is better, but still troubling, said the report.
More of those adults are likely to have debt and higher concentrations of debt than past generations, EBRI researchers found.
But in a comforting note, the study said the average debt for families with heads of households 55-plus declined to $76,679 in 2016 from $82,968 in 2010.
At the same time, debt payments for that group shrunk to 8.2 percent of income from 11.4 percent in the same period.
Much of that decline, said EBRI, was attributable to their lower mortgage burdens which dropped to 5.7 percent in 2016 from 8.3 percent in 2010.
“While improving in many respects in the most recent years, the overall trends in debt are troubling as far as retirement preparedness is concerned,” the study concluded.
Source: National Institute on Retirement Security, “New report finds 86 percent of Americans believe nation faces retirement crisis,” Business Wire, March 5, 2015, http://finance.yahoo.com/news/report-finds-86-percent-americans-13300013....