The Impact of Rising Household Debt Among Older Americans

As older households transition into retirement, their labor income, as well as their ability to accumulate more income-producing assets, declines and they will need to primarily live off their retirement plans and Social Security income. Carrying debt through retirement affects retirees’ financial security as they have more expenses to cover with limited resources. As such, having debt at older ages can affect the timing of retirement and Social Security claiming. This in particular is important as Baby Boomers continue to enter retirement in large numbers and, according to many studies, are known not to be well prepared financially for retirement.