Among people aged 65 to 74, the share with debt rose from 50% in 1989 to 65% in 2022.
Retiree Debt Is Real, and Growing
Debt in retirement is a complicated issue, as discussed in a recent publication by Boston College's Anqi Chen, Siyan Liu and Alicia Munnell. Retiree debt is growing and has been since the mid-90's. Today about 60% of Americans over 65 owe money.
This demographic often finds it difficult to keep up with payments. 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.
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.
Nearly one in four (22 percent) U.S. adults said they have no emergency savings. Despite economic challenges, the percentage remains relatively unchanged year-over-year. In 2022, 23 percent of Americans had no emergency savings.
Statistics vary, but between 55 percent to 63 percent of Americans are likely living paycheck to paycheck.
Overall, the national average card debt among cardholders with unpaid balances in the fourth quarter of 2023 was $6,864, down from $6,993 in the third quarter. That includes debt from bank cards and retail credit cards.
Nearly 2 in 5 Retirees Have No Retirement Savings
The survey found that about 37% of retirees say they have no retirement savings, up from 30% in 2022, and only about 12% have at least the recommended $555,000 in savings.
Seniors tend to hold less debt than younger Americans, but they also face more hurdles in paying it down. The average baby boomer, aged 59 to 77, carried $19,203 in non-mortgage debt in the second quarter of 2023, according to Experian, the data analytics company.
What they found is 19% of homeowners 65 and older are still making monthly mortgage payments. As inflation continues to prove a stubborn economic drag on the pocketbooks of Americans, it's safe to assume many of these homeowners find their monthly mortgage payment a significant burden to their monthly cash flow.
You may hear that seniors shouldn't worry about old debts. This is partially, but not completely, true. Many seniors are “judgment proof,” which means their income is derived from retirement, Social Security, or other accounts that can't be garnished.
Analysis of the debt share in the U.S. shows that people aged 40-49 hold the largest amount of debt at $4.21 trillion in total. People aged 50-59 have the most credit card debt in total at $0.21 trillion, and people aged 30-39 have the most student loan debt at $0.5 trillion.
How much does the average 70-year-old have in savings? We were curious, too, so we asked. Our 2023 Planning & Progress study found that the average amount of retirement savings for 70-year-olds in the U.S. is $113,900.
Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved.
In the U.S., the average credit score is 716, per Experian's latest data from the second quarter of 2023. And when you break down the average credit score by age, the typical American is hovering near or above that score.
Key takeaways. Debt-to-income ratio is your monthly debt obligations compared to your gross monthly income (before taxes), expressed as a percentage. A good debt-to-income ratio is less than or equal to 36%. Any debt-to-income ratio above 43% is considered to be too much debt.
Average consumer household debt in 2023
The New York Fed's quarterly Household Debt and Credit Survey (HHDC) shows that total consumer debt stands at $17.29 trillion as of the third quarter of 2023. That's a record high. According to Experian, average total consumer household debt in 2023 is $103,358.
Financial setbacks made it difficult to achieve milestones
In addition to the plethora of financial challenges consumers faced this past year, 65% of Americans experienced financial setbacks in 2023.
Those living paycheck to paycheck devote their salaries predominantly to expenses. Living paycheck to paycheck may also mean living with limited or no savings and refer to people who are at greater financial risk if they were suddenly unemployed.
What is the average and median retirement savings? The average retirement savings for all families is $333,940 according to the 2022 Survey of Consumer Finances.
The median account balance in 2019 was around $5,300, while the average account balance is around $41,600. This is the latest available data, as the Federal Reserve releases this survey every three years. The Fed plans to publish its 2022 survey data later this year.