The Finance of Longevity

Do Consumers Believe In Debt After Retirement?

Even the good debt, mortgages, weighs down retirees

New research from LIMRA Secure Retirement Institute. Visit

LIMRA Secure Retirement Institute finds* consumers attitudes towards being in debt, even so called “good” debt, is negative during retirement. The Institute finds 67 percent of consumers believe retirees should avoid borrowing money for any reason.

Debt levels for those aged 65-80 increased 40 percent from 2003-2015, according to the New York Fed Consumer Credit Panel1. LIMRA Secure Retirement Institute finds retirees with debt are less confident than those who are debt-free. Seventy percent of retirees without debt are confident they will be able to live the lifestyle they want, while only 51 percent of retirees holding debt feel the same way.

Consumers view mortgage debt more favorably than other types of debt, but its favorability lessens when held during retirement versus working years. While two-thirds of consumers see mortgage debt during working years as “good” debt, only 4 in 10 feel the same about it in retirement. Two-thirds of consumers don’t think people should carry mortgage debt into retirement.

65 Year Old Students?

Student loan debt balances and prevalence are growing among those 65 and older. According to Government Accountability Office (GAO) the number of federal student loan borrowers 65 or older rose by 385 percent between 2005 and 2015. The amount of debt held by Americans ages 65 and over increased from over $2 billion to nearly $22 billion2.

Being in default of a federal student loan debt can result in a reduction of Social Security income used to repay the debt. As of 2015, the GAO observed 5 percent of borrowers 65 or older are facing this reality. The Institute finds student loan debt ranks as the least favorable debt to have in retirement, with 81 percent of consumers viewing student loans as “bad” debt.

Regardless of timing, few consumers view credit card debt in a positive light. Credit card debt is ranked as the least favorable kind of debt to be held during working years and the second least favorable during retirement years. The Institute finds that 7 in 10 consumers agree that credit card debt shouldn’t be carried into retirement.

Being in default of a federal student loan debt can result in a reduction of Social Security income

The traditional goal of debt-free retirement is still widely prized. Poorly timed debt can compromise people’s financial security. Being in debt during retirement can increase both emotional and financial stress. If debt among older Americans continues to increase, strategies to help retirees manage that stress will become more important. This opens an opportunity for financial services companies to help consumers manage their debt.


Assistance could come in the form of consumer-targeted programs to map out short- and long-term debt repayment. These plans could give customers a better handle on the implications and timing of debt. Guidelines regarding how consumers should allocate income between savings versus debt servicing could help them more effectively deploy their money between financial priorities. Additionally, discussing the risks of indebtedness as well as the peace of mind that comes with being debt-free with customers could help put the costs of holding debt in perspective.

*Results based on a survey of 945 Americans fielded by Ipsos in July 2017.



1 Brown, Meta, et al. Graying of American Debt. February 24, 2016, Accessed September 13, 2017.
2 GAO. Social Security Offsets: Improvements to Program Design Could Better Assist Older Student Load Borrowers with Obtaining Permitted Relief. December 2016. Accessed September 18, 2017.