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
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.