The survey, "Retirement and Mortgages," by national mortgage banker American Financing, found 44 percent of Americans between the ages of 60 and 70 have a mortgage when they retire, and as many as 17 percent of those surveyed say they may never pay it off.
Despite laws prohibiting lending discrimination on the basis of age, it can still be challenging for seniors to qualify for home financing. In fact, a 2023 working paper out of the Federal Reserve Bank of Philadelphia found a link between the rejection rate on mortgage applications and the age of the borrower.
A higher percentage of homeowners are retiring with a mortgage than was the case 30 years ago. A recent Harvard University study found that 46% of homeowners between ages 65 and 79 carried a mortgage in 2016, almost twice as many as the 24% of homeowners in this age group who carried a mortgage in 1990.
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
Almost one in ten people expect to over the age of 70 before they are mortgage free.
Just over half, 53%, of all Americans think that they will enter retirement debt-free, but only 23% do so. Eight in 10 middle-income Baby Boomers not yet retired currently carry some debt, and among those who are retired, 77% still carry debt.
Myth 1: Being debt-free means being rich.
A common misconception is equating a lack of debt with wealth. Having debt simply means that you owe money to creditors. Being debt-free often indicates sound financial management, not necessarily an overflowing bank account.
Another study revealed that 44% of 60- to 70-year-old homeowners are carrying mortgage into retirement, and 32% expect it will take them more than eight years to pay it off. Your mortgage is a factor in your retirement income plan and can affect your quality of life.
The largest shares of homeowners 65 and older still with a mortgage are in Miami, Los Angeles, and Sacramento, Calif., according to the analysis. On the other hand, three Texas metro areas—Houston, Austin, and Dallas—have the smallest share of homeowners 65-plus with a mortgage.
Key takeaways. The average amount of retirement savings for 70-year-olds is $113,900, according to our 2023 Planning & Progress survey. The ideal retirement plan involves generating multiple streams of income to provide both stability and tax flexibility in retirement.
The average retirement savings for all families is $333,940 according to the 2022 Survey of Consumer Finances. Taken on their own, those numbers aren't incredibly helpful. There are a variety of decent retirement savings benchmarks out there, but how much money other people have isn't one of them.
The median household income for Americans aged 65 and over was $50,290 in 2022, according to the most recent Census Bureau data. That breaks down to an average of $4,190.83 a month. In 2024, the social security benefit will increase by 3.2% — matching the rate of inflation in October.
Age doesn't matter. Counterintuitive as it may sound, your loan application for a mortgage to be repaid over 30 years looks the same to lenders whether you are 90 years old or 40.
Absolutely. The Equal Credit Opportunity Act's protections extend to your mortgage term. Mortgage lenders can't deny you a specific loan term on the basis of age.
No age is too old to buy or refinance a house, if you have the means. The Equal Credit Opportunity Act prohibits lenders from blocking or discouraging anyone from a mortgage based on age.
Continuing to make monthly mortgage payments makes sense for retirees who can do it comfortably and benefit from the tax deduction. If you're retiring within the next few years and have the cash to pay off your mortgage, it may make sense to do so, particularly if the funds are in a low-interest savings account.
Among retirees, 71% have debt not related to their mortgage with an average balance of $19,888, according to the 2023 State of Retirement Finances report from Clever Real Estate. Some of the main reasons retirees carry debt include: Changing market conditions. Depletion of savings.
Key Takeaways. Carrying a mortgage into retirement allows individuals to tap into an additional stream of income by reinvesting the equity from a home. The other benefit is that mortgage interest is tax-deductible. On the downside, investment returns can be variable while mortgage payment requirements are fixed.
If you run out of money in retirement, you may need to rely on family members or government programs for financial assistance. You may also need to reduce your standard of living or make significant lifestyle changes.
Nationally, a little more than 15 million homeowners 55 to 74 years old don't have a mortgage compared to about 17.7 million who do. For comparison, about 9.6 million homeowners 65 and up have a mortgage, while more than 16 million (16,184,634) don't.
This allowed homeowners to refinance and switch to shorter-term mortgages without significantly increasing their monthly payments. The number of mortgage-free homes in the U.S. soared by 7.9 million from 2012 to 2022, reaching a total of 33.3 million, per the report.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
Are people with less debt happier? Yes, 97% of people with debt say they would be happier without it. People with debt are more likely to suffer depression or anxiety.
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.