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Is Rising Household Debt Affecting Retirement Decisions?

IZA Discussion Paper No. 13182

49 Pages Posted: 4 May 2020 Last revised: 6 May 2025

See all articles by Barbara A. Butrica

Barbara A. Butrica

National Institute on Retirement Security

Nadia S. Karamcheva

Government of the United States of America - Congressional Budget Office (CBO); Boston College - Center for Retirement Research; IZA Institute of Labor Economics

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Abstract

Household debt among older Americans approaching retirement has increased dramatically over the past couple of decades. Older households have become increasingly more indebted and more leveraged. While mortgages remain the predominant type of debt among households in their 50s and 60s, in recent years, student loan debt has also risen among these households. Using household survey data to examine how late life debt affects retirement decisions, we find that more indebted older adults are more likely to work, less likely to be retired, and on average expect to work longer than those with less debt.

Keywords: older adults, household debt, mortgages, student loan debt, retirement, social security

JEL Classification: J21, J26

Suggested Citation

Butrica, Barbara A. and Karamcheva, Nadia S., Is Rising Household Debt Affecting Retirement Decisions?. IZA Discussion Paper No. 13182, Available at SSRN: https://ssrn.com/abstract=3590880

Barbara A. Butrica (Contact Author)

National Institute on Retirement Security ( email )

1612 K Street NW
Ste. 500
Washington, DC 20006
United States

Nadia S. Karamcheva

Government of the United States of America - Congressional Budget Office (CBO) ( email )

Ford House Office Building
2nd & D Streets, SW
Washington, DC 20515-6925
United States

Boston College - Center for Retirement Research

Fulton Hall 550
Chestnut Hill, MA 02467
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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