Key Takeaways

  • Older adults increasingly are retiring with debt and are carrying greater amounts of debt than ever before.

  • Medical expenses and credit cards represent two of the most significant areas of senior debt.

  • Download our issue brief to learn what trade-offs older adults can make to cope with debt.

Today, more older adults are carrying debt into retirement more than ever before, and the amount of debt burden has skyrocketed over the past decade. For many, just keeping pace with the cost of daily living is a challenge.

A profile of senior households with debt

In 2015, the National Council on Aging, or NCOA, surveyed aging network professionals on their clients’ debt, and how it impacts these clients’ economic security. The results of this survey, combined with data from several national surveys of consumer finances and debt, are featured in the issue brief, Older Adults & Debt: Trends, Trade-offs, and Tools to Help. (This brief was updated in 2018 with new data.) According to the Survey of Consumer Finances, the percentage of households headed by an adult aged 65 or older with any debt increased from 41.5% in 1992 to 51.9% in 2010 to 60% in 2016. Median total debt for older adult households with debt was $31,300 in 2016 – more than 2.5 times what it was in 2001 (see below).

Chart showing median debt for households between 1989-2016, with a peak of $41,500 in 2010 and $31,300 in 2016

Medical debt

Increasingly, medical debt poses the most significant barrier to economic well-being.

  • More than 84% of people aged 65+ are coping with at least one chronic condition, and often more as they age.
  • A study in the Journal of General Internal Medicine revealed that out-of-pocket medical expenditures in the five years prior to an individual's death totaled more than $38,000, leaving 1 in 4 seniors approaching bankruptcy.

Credit card and housing debt

Another common source of debt among senior households is credit cards. In 2001, only 24.2% of senior households held credit card balances; by 2016, more than 34.2% did. According to the Survey of Consumer Finances, in 2016, 29.2% of older adult households owed money on a mortgage, home equity line of credit, or both. Of these, the median money owed was $68,500.

Trade-offs in dealing with debt

The NCOA survey found that seniors often make trade-offs to save money in the short term that can be harmful to their long-term health and finances. Among aging network professionals surveyed:

  • 23% regularly encounter seniors forgoing needed home/car repairs, which increases the risk of accidents and falls--the leading cause of injuries among seniors.
  • Nearly 15% regularly encounter seniors cutting pills, which can limit their effectiveness.
  • Just under 14% regularly see seniors skip meals, which can lead to nutrient deficiency.