Racial Differences in Debt Delinquencies and Implications for Retirement Preparedness

Abstract

We document the prevalence and amount of debt delinquency in the US among older adults, overall and by racial/ethnic group characteristics. Using administrative data on credit use for a sample of 4 million older adult borrowers, we show that about one in five consumers age 50+ with a credit bureau record had delinquent debt in August 2022, suggesting difficulties meeting financial obligations in retirement. The prevalence of debt delinquency decreased with age. Consumers living in areas where a majority of residents identify as American Indian/Alaska Native, Black, Hispanic, or Asian American/Pacific Islander were more likely to have delinquent debt and/or higher median amounts of delinquent debt, relative to consumers in majority-White areas, for various types of delinquent debt.

Keywords: racial differences, debt, retirement, financial wellbeing, credit use

JEL Classification: D14, D15, E21, J15, G51