The baby boomers might not be ailed with as much loan issues as any recent graduate, but things aren’t all rainbow for them. This thing is especially true for people living in Houston as stated in a report provided by the Lending Tree. It is an online exchange site for lending that looked at the average remaining balance for 100 of the largest cities in the U.S.
The average debt balance was $31,626 in Texas City. Little Rock, Ark followed in the second place and San Antonio was at the 3rd place with average balances of around $30,767 & $30,000 respectively. The baby boomers that were born between the year 1946 & 1964 owed an average balance of higher than $25,000 in the non-mortgage debts. Credit Card Balances and Auto Loans made up for the greatest shares in these debt balances which were close to 38.5 percent & 34.9 percent respectively.
Also, having debt during retirement might not be as uncommon. In the year 2016, about 70 percent of U.S. households being led by people aged between 65 and 74 had a pending debt which includes credit card balance, auto loans, as well as mortgages. This report was provided by the Federal Reserve’s Survey of Consumer Finances. Around half of the households led by people aged 75 and older were noted to have debts as well.
Most of the financial advisers tend to suggest that future retirees might pay off a good amount from their pending debts prior to retirement. This puts the baby boomers in the tough position considering the fact that many are in or at least approaching the next phase in their lives. Many retirees tend to live on a fixed income in spite of the fact that they have pensions, social security, and savings. The people after retirement tend to experience a constant increase in expenses such as the rising medical bills.
Although the debts for baby boomers are mostly with credit cards and auto loans, there is another variant of debt that has become rather common. It is the student loans that have taken over the financial market. This generation might have their own debts, but some of them even take loans for the children as well as grandchildren. This jeopardizes their financial health. The total number of loan borrowers aged 60 and above with student debt increased from the number 700,000 in the year 2005 to 2.8 Million in the year 2015.