Older Americans and Debt

In this episode of the Friends Talk Money podcast, the topic is debt and retirement. Co-host Richard Eisenberg — the managing editor of Next Avenue, the public media website for people 50+ — leads the discussion on the rising amount of debt held by retirees compared to the past and which types of debt cause the most stress for retirees.

Eisenberg interviews two experts:

One is Chris Farrell, a journalist and author (Purpose and a Paycheck) who focuses on personal finance and work topics for people 50+ in media outlets including Next Avenue and public radio’s Marketplace. He has recently been studying data about retirees and debt.

The other is Ohio State University professor Stephanie Moulton, co-author of a recent study on the relationship between debt and financial stress for older Americans: Debt Stress and Mortgage Borrowing in Older Age: Implications for Economic Security in Retirement.(https://mrdrc.isr.umich.edu/publications/conference/pdf/2019RDRC%20P5%20Moulton.pdf)

The Next Avenue article, “The Hidden Retirement Crisis: Older Americans’ Debt,” https://www.nextavenue.org/retirement-older-americans-debt/) describes some of Farrell’s and Moulton’s insights.

Key statistics:

• The median total consumer debt of households headed by someone 65 or older in 2016 ($31,300) was 2 ½ times what it was in 2001 and nearly 4 ½ times the level in 1989.
• Some 60% of 65+ households carried debt in 2016, up markedly from about 42% in 1992.
• Stress resulting from a $1 increase in credit card debt, is the equivalent of stress due to a $14 to $20 increase in mortgage debt.