Data & Research November 14, 2017

Americans View Debt in Retirement as a Negative

However, debt held by those between the ages of 65 and 80 increased 40% between 2003 and 2015.
Reported by

Americans think it is bad thing for those in retirement to be carrying debt, the LIMRA Secure Retirement Institute found in a survey.

However, data from the New York Fed Consumer Credit Panel indicates that those between the ages of 65 and 80 increased their debt load by 40% between 2003 and 2015.

The LIMRA Secure Retirement Institute found that 51% of retirees with debt are confident they will be able to live the lifestyle they want, but for retirees without debt, that soars to 70%.

Sixty-six percent of Americans view a mortgage held during one’s working years as “good” debt, but only 40% think this is true for those in retirement. Two-thirds (66%) of Americans do not think it is a good idea for people to carry mortgage debt into retirement.

LIMRA also discovered that Government Accountability Office (GAO) data shows that the number of student loan borrowers 65 or older rose 385% between 2005 and 2015. In that period of time, the amount of student loan debt people in this age group carry ballooned from $2 billion to nearly $22 billion. Retirees who default on federal student loan debt can see their Social Security payments partially garnished. In fact, GAO found that in 2015, 5% of those 65 and older are facing this reality.

The LIMRA survey found that 81% think having student loan debt in retirement is a negative. Seventy percent also think that it is unwise for a retiree to be carrying credit card debt. LIMRA says retirees with debt present an opportunity for financial advisers to help them manage this debt—balancing the need for income with the need to pay down debt.

LIMRA’s survey is discussed in a recent blog on its website here.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Data & Research November 13, 2017

Employees Favor Student Loan Repayment Benefits

A survey from Millennial Personal Finance found most workers would rather use student loan repayment benefits than other work features. 
Reported by

As more workers are revealing an interest in student loan repayment benefits within the workforce, a recent survey from Millennial Personal Finance shows employees are willing to sacrifice other benefits for help with repayments.

Conducted with 500 recent college graduates working full-time and holding student loan debt, the survey found 23% of respondents said they would forgo health care benefits for student loan repayment help; 38% said they would switch out dental care benefits; 46% would give up paid time off (PTO); 33% would sacrifice retirement benefits; and 43% would rather have a student loan repayment benefit than life insurance.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Employee benefits were not the only perk workers said they would consider cutting. According to the survey, a little more than half (53%) of workers revealed they would consider a salary cut, as long as they received a student loan repayment benefit in replacement. If a company were to offer a student loan benefit, 84% of respondents said they would strongly consider that job over others that did not.

Stress over student loan debt disturbs efficiency in the workforce, the survey found. Fifty-seven percent of workers replied “yes” when asked if the pressure in repaying student loan debt affects their productivity at work. Ninety-three percent of respondents who have a student loan repayment benefit with their employer said they are making additional debt payments on top of their employer’s contribution.

More than one-third (34%) of workers believe an income-driven repayment (IDR) plan would be most accommodating in repaying student debt. Student loan repayment benefits came in second with 33% of workers saying they would be most helpful; 30% of respondents believe a student loan refinancing tool would assist them better; and 4% said starting a GoFundMe would be the best option.

The survey also found that even though respondents would forgo their benefits, most (84%) were unaware of H.R. 795, the Employer Participation in Student Loan Assistance Act, a piece of legislation that would encourage employers to offer the benefit by lengthening tax exclusions to student loan repayments by an employer to an employee. Still, the survey reported that 62% of respondents want their congressman or congresswoman to support the bill.

More information about the study can be found here.

«