More than half a century ago, the elderly were more likely to live in poverty than any other age group. Thankfully, that has changed, and the poverty rate for people aged 65 and over was less than 10 percent in 2010.
Sadly, however, more elderly are saddled with debt of all kinds. In fact, debt owed by the elderly has increased since 1989, both in percentage of households carrying debt and in the average value of the debt.
In households where the head of the family is aged 65 to 75:
- About two-thirds of families hold some type of debt, up from half in 1989.
- For families that hold debt, the average value is $109,000, a 330 percent increase from the $25,000 average in 1989 (2010 Dollars).
In households where the head of household is over 75:
- 39 percent have debt, up 17 percent since 1989.
- The average debt value increased almost 250 percent from
$20,000 in 1989 to $71,000 in 2010.
The increase in number of families holding debt is not just isolated to older age groups; the percentage of households with heads younger than 55 holding debt decreased over the same period.
Debt secured by the primary residence, either mortgages or home-equity loans, was the primary driver.
- Forty percent of 65-75 year olds household have home secured debt, almost double the amount in 1989.
- The average value of this debt quadrupled from around $30,000 to $122,000 over the same time.
- The percentage of households over 75 holding debt also quadrupled from 6 percent to nearly one-quarter, and the average debt of these households grew from $33,000 to $80,000.
Increasing debt is troubling because these groups often receive a fixed income, and it’s unlikely that this debt will be paid off.
An increase in debt implies an increasing difficulty in maintaining living standards, perhaps because people are living longer.