In Older Americans, Rising Debt May Adversely Affect Health

Older adults typically carry less debt than younger ones because people tend to shed debt as they approach and enter retirement. But in recent decades, each cohort of seniors has been more indebted than the previous one.

“There’s a group of older people in financial distress,” said Annamaria Lusardi, an economist at the George Washington University. “They’re highly leveraged; they’re carrying high-cost debt. They’re being contacted by debt collectors. They’re not going to enjoy their golden years.”

Dr. Mudrazija and his co-author, Barbara Butrica, a senior fellow at the institute, used data from the national Health and Retirement Study and calculated that in 1998, about 43 percent of Americans over age 55 had debt, a median of $40,145. By 2016, about 57 percent had debt and more of it: a median $62,784, adjusted for inflation.

The proportion whose debt represented 30 percent of their total assets had risen to almost 45 percent, and the proportion whose debt-to-asset ratio had reached a worrisome 80 percent nearly doubled, to 15 percent.

Although seniors with any debt were more likely to encounter health problems, the kind of debt mattered, according to the study, which was published by the Boston College Center for Retirement Research.

Secured debt, like mortgages and other home loans, is backed by an asset: the dwelling. Such debt rose among older borrowers as real estate prices soared and interest rates remained low. “It’s increasingly less the norm for people to pay off their mortgages before they retire, the traditional model,” Dr. Mudrazija said.

But secured debt appeared less detrimental to health than unsecured debt like credit card balances, student loans and overdue medical payments, which usually charge higher interest rates. About 24 percent of older adults’ debt was unsecured in 1998; by 2016, the proportion had climbed to 35 percent.