Retirees are more likely to have credit card debt than any other kind. Roughly six in 10 retirees had debt in 2024, according to the EBRI report. Of that group, 68% had credit card debt, 38% had mortgage debt and 34% had car loans, the three most common types.
Americans collectively owe over $1 trillion in credit card debt. But one generation carries the most, on average: Gen X. The average credit card balance for Gen Xers, defined at those between the ages of 43 and 58, rose to $9,123 in the third quarter of 2023, according to Experian's latest available data.
While many older homeowners own their properties free and clear of a mortgage payment, this is not a feasible reality for many seniors. In fact, more than 10.5 million Americans at or over the age of 65 still pay into a forward mortgage loan, according to a study conducted by LendingTree.
There is no specific age to pay off your mortgage, but a common rule of thumb is to be debt-free by your early to mid-60s.
Debt Collection Protections for Seniors
Some of the legal ways seniors are protected from unfair debt collection are: Debt collectors can't garnish income from retirement accounts, Social Security, VA, or other government benefits.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
Senior Debt, or a Senior Note, is money owed by a company that has first claims on the company's cash flows. It is more secure than any other debt, such as subordinated debt (also known as junior debt), because senior debt is usually collateralized by assets.
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024.
Nearly half — 45% — of all Americans who retire at age 65 are likely to run out of money before they die, according to the Morningstar Center for Retirement & Policy Studies.
What Is the Average Net Worth at Retirement? According to recent data from the Federal Reserve, the average net worth for those aged 65 to 74 was $1,794,600, which is more than four times the median net worth of $409,900. This significant difference is because the super-wealthy skew the average much higher.
Senior debt has the highest priority and therefore the lowest risk. Thus, this type of debt typically carries or offers lower interest rates. Senior debt is most often secured by collateral, also making it relatively less risky. Subordinated debt carries higher interest rates given its lower priority during payback.
For example, one rule suggests having a net worth at 70 that's equivalent to 20 times your annual expenses. If you spend $100,000 a year to live in retirement, you should have a net worth of at least $2 million.
At the close of 2019, the average household had a credit card debt of $7,499. During the first quarter of 2021, it dropped to $6,209. In 2022, credit card debt rose again to $7,951 and has increased linearly. In 2023, it reached $8,599 — $75 shy of the 2024 average.
The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.
In 2022, 66.8% of older households had debt. Overall, the older the head of the household is the less likely the household is to have debt. In 2022 in families in which the head was 55-64, 77.2% had debt. That drops to 64.8% when the head is 65-74 and 53.4 when the head is 75 or older.
Gen X (ages 43 to 58) not only carries the most debt on average of all the generations, but is also the debt leader in credit card and total non-mortgage debt.
In a recent NerdWallet survey, 57% of Americans said they were living paycheck to paycheck.
High-interest credit card debt can devastate even the most thought-out financial plan. U.S. consumers carry $6,501 in credit card debt on average, according to Experian data, but if your balance is much higher—say, $20,000 or beyond—you may feel hopeless.
According to the Federal Reserve's Survey of Consumer Finances (SCF) for 2022 (the most recent study released publicly), the average savings balance for people ages 64 and younger ranged from $20,540 to $72,520, with median balances ranging from $5,400 to $8,700.
60% of Americans Age 65 and Older Carry More Debt Than 30 Years Ago. Debt can seriously risk your retirement, and it's on the rise. When it comes time to retire, one of the best first steps is to control your finances. Cut down on bills and household spending so that you can maximize the value of your retirement income ...
When people pass away, their assets become the property of their estate, and this estate has to settle credit card and other debts before beneficiaries can collect their inheritance.
Mortgage debt remains uncommon among homeowners age 65-plus relative to their younger counterparts; in fact, the fraction of homeowners age 65-plus who had a mortgage in 2022 (34 percent) was less than half that of homeowners under age 65 (70 percent) 3.