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Seniors Hit Hard by the Great Recession

A new report examining the debt of older Americans reveals that seniors aged 75 and older have incurred a substantial increase in debt between the years of 2007 and 2010.

The report, compiled by researchers from the Employee Benefit Research Institute (EBRI), shows an increase both the number of older seniors with debt, and the total amount of debt they have accumulated.

The percentage of seniors aged 75 and older who had debt grew from 31.2 percent in 2007, the year the US began to fall into recession, to 38.5 percent in 2010. The average amount of debt also more than doubled, from $13,665 in 2007 to $27,409 in 2010.

Though debt loads were far greater for people between the ages 65 to 74, the percentage holding debt held steady at about 65 percent. Americans aged 65 to 74 actually saw a decrease in total debt, with average debt falling from $72,922 in 2007 to $70,875 in 2010.

EBRI’s senior research associate Craig Copeland believes the likely cause of debt in older seniors is medical expenses. Although most older Americans are covered by Medicare, Copeland noted that many are still responsible for co-pays and other out-of-pocket expenses, such as expensive medications that are not fully covered. And since most Americans age 75 and older are living on fixed retirement income, they have little choice but to take on debt to pay for a large, unexpected expense.

Another culprit is housing debt. The number of families with heads age 75 or older who owed housing debt increased from 10 percent in 1992 to 24 percent in 2010.  However, the report also shows the percentages of families with housing debt increased significantly across all age groups, pointing to an alarming trend for those approaching retirement age.

Copeland concluded that “the debt results are troubling as far as future retirement preparedness is concerned, in that the data indicate that American families approaching retirement or newly retired are more likely to have debt—and higher levels of debt—than past generations.”

Read the articles: Not-So-Golden Years: Over 75, Burdened By Debt, Housing Key Driver of Spiking Debt Among Older Households, or view the full report: Debt of the Elderly and Near Elderly, 1992–2010.



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