At a Glance | April 9, 2020 Older Households and the Ratio of Love to Debt 1 Using data from the Health and Retirement Study and the RAND HRS Family data, 2 EBRI reports on debt among older households with a history of intra-family financial transfers. 2 3 INTRA-FAMILY GIVING Share of Households With Debt Older households with a history of helping family 73% 80% members financially are more History of Intra-Family 60% 59% Financial Transfers likely to carry debt. 47% 38% No Transfers 30% 0% Ages 50–64 Ages 65–74 Ages 75+ HOW MUCH SUPPORT IS TOO MUCH Median Ratio of Total Transfers Made to Initial Non-Housing Assets for Ages 75+ Conditional on Having a Transfer History At the median, those 75 and older with debt transferred 44 Age 75+ With No Debt Age 75+ With Debt percent of the value of their 4 initial non-housing assets to family members. However, for 27% 44% such households who didn’t of balance of balance have debt, 27 percent of assets transferred transferred were transferred at the median. 2727+ 7373+J 44+44 5656+J HIGH, LOW, OR NO TRANSFER Percentage With Debt, by Age and Intra-Family Transfer Status While the likelihood of having 78% debt declines by age, those with 80% high levels of family giving have the highest probability of and 73% most persistent debt. 55% 61% 5 High Transfers 41% 5 Low Transfers 40% No Transfers 30% Age 55 57 59 61 63 65 67 69 71 73 75 1. Health and Retirement Study, public use dataset. Produced and distributed by the University of Michigan with funding from the National Institute on Aging (grant number NIA U01AG009740). Ann Arbor, MI (2014, 2015). 2. “Intra-family giving” is defined as giving money, helping pay bills, or covering specific types of costs such as those for medical care or insurance; schooling; or down payments for a home, rent, etc. to children or grandchildren. The financial help can be considered support, a gift, or a loan. 3. As of 2014, the last year available in the RAND HRS Family data. 4. Non-housing assets: sum of gross value of all other real estate and net value of vehicles owned; individual retirement accounts (IRAs), stocks, and mutual funds; checking, savings, and money market accounts; certificates of deposit (CDs), government savings bonds, Treasury bills, and bonds and bond funds; and any other source of wealth. 5. Low and high transfers are defined as having less and more than the median ratio of total transfer (made between ages 55 and 75) to non-housing assets at age 55, respectively. SOURCE: Zahra Ebrahimi, “The Impact of Rising Household Debt Among Older Americans,” EBRI Issue Brief, no. 502 (Employee Benefit Research Institute, March 12, 2020). © 2020 EBRI This report is copyrighted by the Employee Benefit Research Institute (EBRI). You may copy, print, or download this report solely for personal and noncommercial use, provided that all hard copies retain any and all copyright and other applicable notices contained therein, and you may cite or quote small portions of the report provided that you do so verbatim and with proper citation. Any use beyond the scope of the foregoing requires EBRI’s prior express permission. For permissions, please contact EBRI at permissions@ebri.org.