Seniors Are Taking on More Debt

By Joseph Lawler

The Urban Institute's Nadia Karamcheva takes note of an interesting phenomenon: American seniors are taking on more debt. And it's not just a product of the recession, but something that's been developing for a while:

And it's not a matter of increasing incomes. Seniors' debts have been increasing relative to their assets:

The obvious takeway from this data is that it reflects poorly on the state of financial security for U.S. seniors. But it's not as clear what exactly is causing this increase in old-age debt, especially given that it's not limited to the aftermath of the recession.

One explanation might be that there's been innovation in the kinds of financial products available to seniors in recent years. For instance, sales of reverse mortgages peaked in 2009. This Fred Thompson ad tells everything you need to know about these debt instruments and who's using them:

Another possibility is that Americans are expecting to live longer, and so the definition of "seniors" is picking up more people who have not yet finished paying off debt on the younger end. For that reason, it would be interesting to see this data broken down by age. That noted, the increase in debt among seniors over the past 15 years or so is probably too steep to be explained by changing demographics, leaving a bit of a mystery about what's causing it.

Joseph Lawler is editor of RealClearPolicy. He can be reached by email or on twitter.

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