This paper uses financial data from a major credit bureau for a nationally representative 2 percent random sample from more than 250 million consumer records to
examine the financial health and indebtedness of older adults. The data cover the years 2010 through 2019 and follow the same consumers over time. Consumer records
include numerous sources of debt and information on their total credit available, total balances, amounts past due, debt in collections, and bankruptcies and foreclosures.
Consumers ages 50 and older are decreasingly indebted since the Great Recession. This trend masks the increase in indebtedness among adults ages 70 and older due
primarily to mortgages. Not only are they more indebted, but our findings suggest that their financial health—reflected by their credit scores and capacity to
borrow—has worsened over time.
Where older people live matters for their use of debt. Older adults from socioeconomically disadvantaged areas carry debt well into their retirement years, whereas
those who live in wealthier zip codes appear to deleverage as they age.
More than other sources of debt, credit card debt is the most highly correlated with spells of poor credit—increasing both the likelihood of experiencing a
spell and reducing the likelihood of exiting a spell. This has negative implications for consumers ages 70 and older since credit cards are their largest source of
Download the full Center for Retirement Research at Boston College paper here.