Retirement & Financial Planning Report

About half of households headed by someone age 65 and older has debt, which can be a significant issue for those living on a fixed income, the Government Accountability Office said in a recent report.

Some households have more than one form of debt: mortgage debt is the most common, 29 percent, followed by credit card debt, 27 percent, automobile loans, 16 percent. Eighteen percent held miscellaneous forms of debt and 3 percent had student loan debt, typically from having furthered their own education later in their working careers or from having co-signed for a child or grandchild’s loans.

In all, 52 percent of those households had some form of debt.

GAO cited outside studies that found that the median amount of debt for those households increased 56 percent, from about $13,600 to $21,200, over 1998-2010. Further, the overall debt ratio—total debt as a percentage of total household assets—rose from 6.4 percent to 13 percent. “Such debt reduces net worth and income and can erode retirement security,” it said.

In contrast, among households headed by persons 18-64, 50 percent had mortgage debt, 43 percent had credit card debt, 34 percent had vehicle debt, 24 percent had student debt and 31 percent had other debt—in all 81 percent of those households have some form of debt.