What do investors 60 and up consider to be the greatest obstacles to their current or future retirement planning
American families headed by elderly individuals ages 75 and older saw increases in their housing and credit card debt in the years between 2007-2010, a recent Employee Benefit Research Institute (EBRI) report finds.
The percentage with housing debt increased from 14 percent in 2007 to 24 percent in 2010, while the median credit-card debt for those families carrying it increased substantially from $838 in 2007 to $1,800 in 2010. The average debt level for families with heads 75 or older increased from $13,665 in 2007 to $27,409 three years later.
Families headed by working baby boomers ages 55-64 were found to have the highest level of debt, but it decreased from $112,075 in 2007 to $107,060 in 2010. The EBRI analysis notes that the driver of debt for these households was housing debt. Almost three-fourths of debt payments among these families went to housing debt.
Any debt that a near-elderly (ages 55-64) or elderly family has accrued entering or living in retirement is likely to offset its asset accumulations, resulting in a lower level of retirement income security, the report states.
“These debt results are troubling as far as future retirement preparedness is concerned, in that the data indicate that American families approaching retirement or newly retired are more likely to have debt—and higher levels of debt—than past generations,” said Craig Copeland, senior research associate at EBRI and author of the article on debt of the elderly, in a statement. “Older families that have taken on higher housing debt may well eventually have difficulty avoiding a major lifestyle change in living standards in retirement, certainly if they are planning to rely on their home as an income producing asset.”
The United States ranks 19th worldwide in retirement security. Learn about it here.
Running out of money in retirement is the greatest financial fear of almost half of Affluent individuals ages 60 and over, according to ongoing Millionaire Corner research. Not saving enough for retirement, similarly, is their greatest financial regret.
Among these investors, health care costs are considered to be the biggest obstacle for current or future retirement plans, according to a Millionaire Corner survey conducted in December, followed by cuts in Medicare and Social Security, and increased taxes.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.