Older Americans Continue To Carry Significant Amounts of Debt

For all the talk that collection agencies need to be spending more time and working harder at understanding millennials, maybe they should be looking at the other end of the generational spectrum, according to data released by the Federal Reserve Board of New York.

While it’s undoubted that, eventually, millennials will take on more debt — which likely will result in more collection-related activity — it’s actually older Americans who have the most debt right now, according to the data. Individuals over the age of 50 are carrying about half of all household debt in the United States, according to the report. Where millennials make up for that lack of debt is by having more debt in delinquency. Individuals between the ages of 18 and 29 are the category of borrowers with the highest delinquency rates.

There are a number of factors that could explain why more older Americans are carrying debt. Baby Boomers are now retiring in greater numbers, which puts them on a fixed income. As well, it has been harder to get a mortgage loan while easier to get an auto loan or student loan.

“The new charts in our report help to better understand how the debt and repayment landscape have shifted in the years following the Great Recession,” said Donghoon Lee, research officer at the New York Fed, in a statement. “Older borrowers now hold a larger share of total outstanding debt balances, while the shares held by younger borrowers have contracted and shifted toward auto loans and student loans.”


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