The oldest Americans are falling further and further into debt at the worst possible times of their lives.
In a report from the Federal Reserve Bank of New York, the total debt burden for Americans over the age of 70 ballooned a staggering 543% from 1999 through 2019 to $1.1 trillion.
Overall, household debt in the U.S. increased by 1.4% to reach $14.15 trillion in the fourth quarter of 2019. It’s the 22nd consecutive quarter where household debt has risen.
Mortgages rose by $224 billion, or 42%, in the fourth quarter to hit the highest volume seen since Q4 2005.
“Mortgage originations, including refinances, increased significantly in the final quarter of 2019, with auto loan originations also remaining at the brisk pace seen throughout the year,” Senior Vice President of the New York Fed Wilbert Van Der Klaauw said in a press release. “The data also show that transitions into delinquency among credit card borrowers have steadily risen since 2016, notably among younger borrowers.”
In addition to a steep rise in debt for Americans age 70 and older, debt for people in their 60s jumped 471% to $2.14 trillion.
Social Security Not Cutting It For Retirees
The increase in debt among the oldest Americans is traced back to a “modest social safety net” like Social Security that is pushing more older people to take on debt to make ends meet, according to a report on bankruptcy.
Another issue for debt among older Americans is that households headed by someone over the age of 75 with debt payments at or more than 40% of their income jumped more than 23% from 2007 to 2016, according to the Employee Benefit Research Institute.
A separate Fed report also pointed out that student loan debt for those 65 and older blew up by 886% per person between 2003 and 2015.
Mortgages were the lion’s share of debt for people in their 60s. Debt among older Americans also included auto loans, credit cards, home equity lines of credit and student loans.
Other highlights from the recent Fed report include:
- 4% of all delinquent mortgages transformed from early delinquency to 90+ days delinquent.
- Nearly 71,000 people had new foreclosure notations added to their credit report between Oct. 1, 2019 and Dec. 31. 2019.
- Outstanding student debt increased by $10 billion to $1.51 trillion in the fourth quarter.
- More than 11% of all student loan debt was classified as 90+ days delinquent.
- Auto loan balances hit $1.33 trillion in the fourth quarter, an increase of 16 billion from the third quarter.
- About 220,000 people had a bankruptcy notation added to their credit report, an increase from the 195,000 in the same quarter a year ago.