Seniors Are in Debt, But Not as Bad Off as They Could Be

Two year ago, I produced a piece on how baby boomers spend their money.  I wanted to find out why many of them were not nearly prepared for retirement.   This time around, I wanted to find out how senior citizens were spending their money.  A lot has changed compared to the same age group just 20 years ago:

  • Today’s seniors (age 65 and older) have a lower poverty rate than the national poverty rate, and the lowest rate since 1993. (as defined by the FPL)
  • Senior’s expenditures have increased 1% per year on average since 1990, inflation-adjusted. (Based on CES data)
  • More seniors carry a mortgage (or home equity-type loan) than in 1990.
  • More seniors own or lease a vehicle than in 1990.
  • Seniors are spending more on pets and hobbies, reflecting their varied interests and independence.

In essence, reflecting on how seniors spend their money might conjure up a picture of a wealthy couple traveling around the world or a low-income individual having to choose between medicine and groceries.  But the truth is somewhere in the middle.  Read more.


Comments (10)

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  1. Bill B. says:

    All of these factors will also deprive many seniors the ability to retire. As more get into debt and have less in retirement, they could likely work until death.

    • James M. says:

      Based on looking at the elderly that I know or have known, retirement seems to be a much more distant possibility than it was for the Greatest Generation.

  2. Devon Herrick says:

    Keep in mind the expected disability-free years of life are greater today than in decades past. Maybe seniors are spending money on mortgages, motorhomes, hobbies because they: 1) are physically able to enjoy these; and 2) expect to live long enough to get enjoyment out of these.

    If Grandpa didn’t die of heart disease in his late 50s there’s a better chance Grandpa and Grandma will have both the money and the desire for a vacation house.

  3. Andrew says:

    It seems like the majority of seniors are spending their money on leisurely activities and goods. Which isn’t necessarily a bad thing, seniors consuming goods for leisure is exactly what retirement is all about.

  4. Matthew says:

    It is interesting that seniors are spending on higher education, now that they have the time to accomplish their life goals, with education being a top priority.

    • James M. says:

      There was a lady that I went to pharmacy school with who was 65 and wanted to become a pharmacist. It was a life long goal of hers and she graduated with the rest of us. I would just hate to be that age and see the amount of loan debt.

  5. Jay says:

    “79 percent of 75+ year olds have at least one car payment.”

    How many old Buicks or Oldsmobiles can there still be on the market?

  6. Lukas L. says:

    A new market appeared for senior citizens. Apartment complexes reserved for them, facilities that gives them all the comforts they need in the same place. This new concept has lured many seniors tired of dealing with the troubles of owning their own house and soon to be seniors are investing in those complexes. New options that changed how seniors lived are a great explanation why they have changed the consumption patterns typically associated with that age range.

  7. property portal says:

    they might be in debt but they are confident enough that they will get over it. its their experience that will help him. anyways thanks for sharing the update.

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