Posted on 02/13/2016 6:25:13 AM PST by Lorianne
Americans in their 50s, 60s and 70s are carrying unprecedented amounts of debt, a shift that reflects both the aging of the baby boomer generation and their greater likelihood of retaining mortgage, auto and student debt at much later ages than previous generations.
The average 65-year-old borrower has 47% more mortgage debt and 29% more auto debt than 65-year-olds had in 2003, according to data from the Federal Reserve Bank of New York released Friday.
The result: U.S. household debt is vastly different than it was before the financial crisis, when many younger households had taken on large debts they could no longer afford when the bottom fell out of the economy.
The shift represents a "reallocation of debt from young [people], with historically weak repayment, to retirement- aged consumers, with historically strong repayment," according to New York Fed economist Meta Brown in a presentation of the findings.
Older borrowers have historically been less likely to default on loans and have typically been successful at shrinking their debt balances. But greater borrowing among this age group could become alarming if evidence mounted that large numbers of people were entering retirement with debts they couldn't manage. So far, that doesn't appear to be the case. Most of the households with debt also have higher credit scores and more assets than in the past
(Excerpt) Read more at nasdaq.com ...
Not this 63 year old. No debt.
This 72 year old. No debt!!
Dittos. Not this 71 year old either.
A 59-year-old, still have a mortgage but otherwise no consumer debt.
“”The average 30-year- old borrower has nearly three times as much student debt as in 2003.””
Exactly where the Democrat Plantation Owners want their slaves to be. Namely, up to their ears in debt so they will be willing supporters of the Democrat Socialist agenda and easily controlled.
Big government does not like debt-free and independent people. Can’t control them.
Any wonder Bernie Sanders is so popular with the younger set who like the sound of “free stuff”?
Americans thus far are not realizing the long term devastating effect that the anti capitalist, tax and regulation happy Obama administration is having on the creation of real wealth. They are numbed by the narcotic high of $19 trillion Federal borrowed dollars, $10 trillion of state and local debts, continued deficit spending and the pseudo promise of unfunded liabilities. Eventually the narcotic high crashes and reality intrudes. America will be a much poorer place in many ways. The level of social justice correlates best with the creation of real wealth, not government redistribution schemes. Sadly there will be more poverty, resentments and violence in an economically weakened America.
55 - no debt! Paid cash for a new car last year (the old one was 13 yo and falling apart.)
I used to read real estate columnist, Robert Bruss and he would advocate for not having your mortgage paid off due to it tieing up your equity. One of the reasons reverse mortgages became a big deal years ago.
Young people have way more college debt and less mortgage, car and credit card debt.
Oh, oh.
until recently, the cost of the mortgage was less than the earnings on a good mutual fund. so, the debt was producing income
“”The average 65-year-old borrower has 47% more mortgage debt and 29% more auto debt than 65-year-olds had in 2003””
Historic low interest rates have encouraged 60 year olds to mortgage their house rather than live debt free.
Under Obama there are millions of 60 year olds who have lost their job to illegal aliens and other reasons and now must mortgage their house to get enough money to live on.
Yup. Obama is fundamentally transforming America.
“Large Increase in Debts Held by Those Over Age 50”
Defensive move. If they have no debt, their kids are more likely to “pull the plug”. If you keep the debt and broadcast that fact, the kids are more likely to do what it takes to keep the pension/SS checks rolling in every month, so at least they’ll have a roof over their heads, albeit in the basement.
I’m 61. During the real estate bubble I sold my McMansion and used the proceeds to retire my mortgage and buy for cash a mobile home in the woods. I have never been happier. No homeowner-s association complaining about my grass or the color I painted my mailbox. While the stick built house was more comfortable and had fewer inherent problems, like rats getting into the plumbing, the lack of those problems wasn’t worth the debt. The mobile home is bigger, and, amazingly, better laid out. Plus, I have built 1,700 square feet of garage with concrete floors and remote control doors. This would have been impossible in my former neighborhood. (It is not legal here, either. But nobody can see my home from the road.)
This is a case where losing debt increased available space and enhanced my pursuit of happiness. I was able to invest the income I made between the sale and getting laid off so that I am now buying and refurbishing mobile homes to rent.
If I had understood the disadvantage of buying a traditional house with a traditional mortgage earlier, I would have been even better off. We become slaves to our lifestyles.
I am old enough to remember a time when the only debt a family may have would be a mortgage and perhaps a car.
I was actually shocked the first time I saw someone use a credit card at a grocery store.
So I am not surprised to discover people are entering old age deep in debt.
First time my doctor tells me I got 6 months or a year to live is when I go max out a brand new mortgage and get the cash, max out all my credit card advances and my signature credit line. Then I’m goin’ to Didney Worl! (the grown up one, LV)
Agree, I pulled out all the cash they would give me a few years ago and refid at 3.75 fixed for 30 yrs. And I was 64 yrs old.
Don’t be fooled by the use of credit cards, I use one but it’s a debit card. I have a couple of store cards where I shop frequently, and I do keep a real credit card for travel. Hotels, car rentals and plane fares all require a credit card. Makes life easier.
Spend wisely and save when you are young and be independent when you are older.
Never owed anything other than a 15 year mortgage and paid that off in 11 years.
Relatives who made much more than us are dead broke and don’t even own their own home.
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