Debt rises for retirees

By BenefitsPro

By Paula Aven Gladych

The number of people over age 60 who carried debt into retirement jumped from 1998 to 2010.

According to the Center for Retirement Research at Boston College, debt among retirees has surged from 10 percent to 18 percent of their assets.

The Center’s Squared Away Blog said individuals with higher incomes were among those to see increased debt in retirement, from 57 percent in 1998 to 70 percent in 2010, a 13 percentage point rise. That figure rose by 17 percentage points for middle-income earners and by 14 percentage points for low-income retirees.

The amount owed also rose for all three income groups.

Mortgage debt is the main culprit. According to the center, many people are paying off their mortgages more slowly than they did in years past and mortgage balances also have increased.

One explanation for this jump is that many homeowners traded up during the housing boom and took on larger mortgages. It is estimated that 17 percent of mortgage borrowers who are close to retirement age owe more than their house is worth.

Many baby boomers want to work longer, so that also could increase the debt figures.

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