Rising Debt Threatens Economic Security of Older People

In a new Fast Fact, the Employee Benefit Research Institute finds that a staggering 1 in 10 retirees reported that their debt was either unmanageable or crushing. These highly indebted retirees were characterized as predominantly female, divorced, Black, and in poor health, with relatively low household financial assets. The retirement lifestyle they portray is fraught with challenges, uncertainty, frustration, and the sense that they are barely hanging on.

In this latest entry to the American Savings Education Council blog series, Mary O’Donnell, President of the RRF Foundation for Aging, examines how debt is impacting retirees’ economic security.


Over the past two decades, both the percentage of older people carrying debt and the amount of debt they carry has increased by 50 percent. In 2001, only 24 percent of households headed by an older adult held credit card balances. By 2016, 34 percent did, according to the Survey of Consumer Finances. At the same time, the median balance held by these households increased from $1,150 to $2,300 (in 2016 dollars).

For older adults, credit card debt and other consumer debt is insidious because it drains whatever assets people have managed to accumulate, especially if their peak earning years are behind them. Unlike mortgage debt, it doesn’t help build wealth.

EBRI (Employee Benefit Research Institute) has helped shine a light on important issues related to debt and older people through its research efforts and its American Savings Education Council program (ASEC). A recent EBRI Issue Brief highlights two particularly troubling trends:

  • The rise in debt prevalence since 2007 has been most acute where heads of households are 75 or older. Indeed, in 2019, the proportion of households with heads 75 or older who have credit card debt reached its highest level in almost three decades.
  • The burden of credit card debt falls disproportionately on older people of color. Families with Black or Latinx heads of households had much higher debt-to-asset ratios than their white counterparts. And their debt was more likely the result of consumer debt rather than housing debt. Families with minority heads of household were also more likely to have debt payments representing more than 40 percent of their income.

Tools That Can Reduce Debt

RRF Foundation for Aging is committed to improving the economic security of older people, and recognizes how debt can put their financial well-being at risk. For example, bankruptcies among older adults are increasing much faster than among middle-aged and younger adults.

Too often, consumers don’t know where they can go for trusted information and assistance to get out of a situation that is spiraling downward. RRF Foundation for Aging has been partnering with organizations to develop innovative resources that help build financial literacy as we age.

The Foundation is supporting the development of an updated and improved online version of EBRI’s popular Ballpark E$timate tool to help people get a more accurate estimate of how much money they would need for retirement. The tool is expected to launch in the near future.

Numerous public and private benefits programs can help low-income older adults pay for health care, housing, food, transportation, and other expenses, which can free up income that can be used to pay down debt. The National Council on Aging (NCOA) supports 80 Benefits Enrollment Centers that provide personalized help to older adults in 40 states to find and enroll in money-saving benefits. NCOA also has partnered with national nonprofit GreenPath Financial Wellness to operate a National Benefits Helpline and Screening Service that provides information, screenings and referrals regarding benefits and other forms of financial assistance. This service is a complement to NCOA’s free online benefits screening tool at BenefitsCheckUp.org. The helpline, which includes access to GreenPath’s trained debt counselors, is being updated, and is expected to be back online in April. For information on when the helpline is available, visit BenefitsCheckUp.org.

Another RRF grantee, the Women’s Institute for a Secure Retirement (WISER) works to improve the long-term financial security of all women through education and advocacy. For the past two decades, WISER has partnered with the Administration for Community Living (ACL) on the National Resource Center on Women and Retirement, which provides a one-stop gateway that integrates financial information, tools, and resources on retirement planning for women — especially older women and others who are most at-risk for financial insecurity — to improve their financial health and avoid financial exploitation. The center offers helpful booklets, guides, fact sheets, and work sheets, covering topics ranging from caregiving to retirement planning to health, long-term care and insurance, among others.

Another good source for trustworthy information is the federal government’s Consumer Financial Protection Bureau (CFPB), which regulates consumer financial products and services under the federal consumer financial laws and educates consumers to make better informed financial decisions. The CFPB’s Office for Older Americans offers educational tools and resources on topics ranging from managing debt and planning for later-life financial security to protecting against fraud.

The Path Forward

The role of rising debt in increasing economic insecurity for older people too often flies under the radar. At RRF Foundation for Aging, we are actively addressing debt in older adults and welcome new approaches that we could invest in that:

  • Develop strategies and tools that educate and empower older people to avoid or mitigate debt;
  • Build the capacity of organizations to help older people facing these problems; and
  • Advocate for policies that protect against needless or excessive debt such as clamping down on predatory lending, providing victim assistance, and addressing financial exploitation.

Ultimately, RRF’s goal is to advance an equitable, stable retirement system that provides sufficient economic security in later life so that older people do not have to resort to debt to meet their most basic needs. 

We look forward to working with more organizations to develop new and innovative solutions that reverse the disturbing trend of increasing debt among older people, especially older people of color, and promote economic security for all of us as we age.