EBRI Notes

“Debt of the Elderly and Near Elderly, 1992–2007,” and “The Relationship Between Union Status and Employment-Based Health Benefits”

Oct 8, 2009 24  pages


"Debt of the Elderly and Near Elderly, 1992–2007"

DEBT LEVELS RISING: Debt levels of those in or near retirement age are heading up: Among elderly families—and especially among the lower-income elderly—both housing debt and consumer debt levels are rising. For some cohorts, a substantial percentage have debt levels well beyond the threshold considered problematic.

PERCENTAGE WITH DEBT: A growing share of older American families had incurred debt through 2007, particularly those ages 55–64—the ages right before or at the start of retirement. The percentage of American families with a head age 55 or older who have some level of debt was 63.0 percent in 2007, almost 3 percentage points higher than 2004, 7 percentage points higher than the 2001, and up nearly 10 percentage points from 1992.

DEBT LEVELS: As the percentage of families with a head age 55 or older with any debt increased from 1992–2007, the average total debt level also increased: from $32,191 (2007 dollars) in 1992 to $70,370 in 2007; the median debt level (half above, half below) of those with debt increased from $15,923 to $43,000. This was a real increase in the average and median debt levels by 118.6 percent and 170.0 percent, respectively, from 1992.

RISING HOUSING DEBT A MAJOR CONCERN: Although rising debt levels are not necessarily a sign of danger for all elderly or near-elderly families (especially if they are also high-income), rising housing debt is of particular concern, since housing typically is the major asset elderly families have. Leveraging it at this point in their lives may leave them without a major resource to finance an adequate retirement, given the recent downturn in the housing market.


The Relationship Between Union Status and Employment-Based Health Benefits

UNION WORKERS MORE LIKELY TO HAVE HEALTH COVERAGE: Union workers are much more likely to have employment-based health benefits than nonunion workers. In September 2007, 83 percent of union workers were covered by health benefits through their own job, compared with 58 percent of nonunion workers. Union workers are more likely to be employed in the public sector, manufacturing industry, blue-collar occupations, and in full-time jobs. Union workers have higher annual earnings than nonunion workers

IMPLICATIONS FOR THE UNINSURED: All else equal, if unionization in the private sector continues to decline, the percentage of workers with employment-based health benefits will continue to decrease, and this trend will be exacerbated by any future declines in public-sector unionization.