Baby Boomers Are Drowning In Loans: Debt Of Average 67-Year-Old Soared 169% In Past 12 Years

Tyler Durden's picture

For those who follow the monthly consumer credit report released by the Fed there was nothing surprising in today's release of the latest Household Debt and Credit Report by the New York Fed. It reports that total household debt rose to $12.12 trillion in Q4, up from $11.83 trillion a year ago...


...mostly as a result of soaring student and auto debt, both trends we have observed on various occasions in the recent and not so recent past.

There is more in the report (a notable discussion focuses on why housing credit has stagnated as much as it has with the Fed seemingly unable to grasp that the bulk of housing purchases in the US in recent years have been by offshore oligarchs using all cash transactions to park money in US luxury housing), but what is the topic of this post is another finding by the Fed, namely that Americans in their 50s, 60s and 70s - the Baby Boom generation - are carrying unprecedented amounts of debt, a shift which according to the WSJ "reflects both the aging of the baby boomer generation and their greater likelihood of retaining mortgage, auto and student debt at much later ages than previous generations."

Incidentally, those debt "retention" are entirely thanks to the Fed which has only itself to thank for: with deposits yielding nothing, an entire generation of Americans 50 and older has been fored to resort increasingly to more and more debt, until this happens:

What this chart shows is that while per capita debt at age 30 fell by 12%; per capita debt at age 65 grew by 48%!

Worse, as the chart below show, while aggregate debt of Gen-Xers has admirably declined by 12% in the past 12 years, the aggregate debt of the average Baby Boomer has soared by an unprecedented 169%!

The biggest shocker: an 886% increase in student loan debt of Americans aged 65 and older.

Some more details from the WSJ: the average 65-year-old borrower has 47% more mortgage debt and 29% more auto debt than 65-year-olds had in 2003.

Some more observations:

Just over a decade ago, student debt was unheard of among 65-year-olds. Today it is a growing debt category, though it remains smaller for them than autos, credit cards and mortgages. On top of that, there are far more people in this age group than a decade ago.


The result: U.S. household debt is vastly different than it was before the financial crisis, when many younger households had taken on large debts they could no longer afford when the bottom fell out of the economy.


The shift represents a “reallocation of debt from young [people], with historically weak repayment, to retirement-aged consumers, with historically strong repayment,” according to New York Fed economist Meta Brown in a presentation of the findings.

Why is this a problem in a world in which cash flow is increasingly scarce? "Older borrowers have historically been less likely to default on loans and have typically been successful at shrinking their debt balances. But greater borrowing among this age group could become alarming if evidence mounted that large numbers of people were entering retirement with debts they couldn’t manage. So far, that doesn’t appear to be the case. Most of the households with debt also have higher credit scores and more assets than in the past."

Assets mostly in the form of equities and bonds, however, those assets will need to be liquidated one way or another to repay what is a record debt load as the Baby Boomer generation grows even old and ever more in debt.

For now, however, the debt repayment cliff has not been hit as banks allow creditors to roll over existing obligations. This means that while debt among the elderly is at record levels, the percentage of this debt that is in some stage of delinquency has been steadily dropping. The NY Fed founds that only 2.2% of mortgage debt was in delinquency, the lowest since early 2007. Credit card delinquencies also declined, while auto loan and student loan delinquencies were unchanged.

“The household sector looks much better positioned today than in 2008 to absorb shocks and continue to contribute to the economic expansion,” said New York Fed President William Dudley in prepared remarks.

Actually, the most debt-sensitive part of the household sector, the Baby Boomers, has never been more vulnerable, and only low rates have allowed this generation to ignore the elephant in the room; with the Fed now hiking rates, this will change drastically in the coming years.

There was some good news in the report: by contrast the overall debt balances of most young borrowers haven’t grown or have declined. The average 30-year-old borrower has nearly three times as much student debt as in 2003. But these borrowers have so much less home, credit card and auto debt that their overall debt balances are lower.

Which also explains why not only are Millennials locked out of purchasing homes, but have become the "renting generation", one where everything is based on the principle of a "sharing economy", where little to no actual asset purchases are required, and where a la carte renting of goods and services for instant needs has become the new norm.

Indeed, as NY Fed economist Meta Brown admits, this shift for young borrowers could have “consequences in terms of both foregone economic growth and young consumers’ welfare." Sadly, with few well-paying jobs for Millennials available, and with little ability to build up an asset or savings base, these trends will continue until they too hit a plateau of unsustainability.

* * *

The full NY Fed report is below (pdf link)

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bnbdnb's picture

Going out gunz blazing.

hedgeless_horseman's picture



Viagra is a helluva drug.

ParkAveFlasher's picture

On the good side, you pay no estate tax on ZERO.

Manthong's picture

Time to claim dementia.

It's Amazon's fault.


NidStyles's picture

I was saying two years ago how much of this is caused by baby-boomers living well beyond their means and buying into the Tribe's system 100%.

WillyGroper's picture

how much is for student debt they co-signed?

Dig Deeper1's picture

Not much but those reverse mortgages are a bitch.

daveO's picture

Just as well. Their wittle snowflakes are too good to live in a 40 year old house, anyway. Jose and Maria will get it cheap on a short sale.

Stuck on Zero's picture

What the graphs tell me is that 60 year olds are borrowing like crazy to put their kids through dental school.

nmewn's picture

Or leveraging the house to the hilt and sticking everything under the mattress.

You can have the house dickweeds but the bed comes with me ;-)

l8apex's picture

No way that 99% of the sheeple are following that plan. 

QQQBall's picture

Jose and Maria, Juan and Guadalupe, Maria and Felipe. Mortgage payment of $500 a bedroom. Rent the garage for $100/Head per month and any closets for $250/month - just park the cars in the front yard instead of the garage.

JRobby's picture

Not much? How about some hard numbers while you are Digging Deeper? Non performing SL's are at 40% so the co signers are in play on collections.

El Oregonian's picture

The "plastic cushion".

Problem is, there is nothing left underneath.

JRobby's picture




ToSoft4Truth's picture

You are correct.


Even worse, the Baby Boomers off shored most of the manufacturing - the manufacturing used to collateralize the pension and social security obligations.



Arnold's picture

That would be your Ma and Pa Clinton that made it so sonny.

Now your Granpa Bernie is your generation's Savior?

Chortle, Sniffle, chortle, nitroglycerin pill.


ToSoft4Truth's picture

Booo!  'Reaganomics'

Arnold's picture

When I was young and dumb and full of...shit, I had a home renovation business.

I paid myself last and we had more work than we could do, a solid backlog.

When the tax code changed, so that credit card interest was no longer a deductible expense against income, my business model and business was gone.

I finished my obligations, made sure every one was paid and closed it up.

Moved on to a twenty year career 'renovating' Superfund sites.

Reaganomics put me out of business once, into a much better decade or two.

Durrmockracy's picture
Durrmockracy (not verified) ParkAveFlasher Feb 12, 2016 1:57 PM

ZIRP will only exist for banksters.  Never for this crew...

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Durrmockracy Feb 12, 2016 3:29 PM

Well to be fair when Social Security was established people were never expected to actually live into their 60s.  So if the government had its way you wouldn't be drowning in loans, you'd be dead...

WTFMOFO's picture

If I was a boomer and had no assetts to pass on and I got the bad news that I had less than a year to live I'd run up my personal debt (like credit cards) and I'd buy my kids some property or auto or something then I'd check the fuck out and let the bankers eat the loss.  Fuck um while I am alive and especially fuck um when I am dead.




Cruel Aid's picture

Unfortunately, that makes sense.

Morallity gap must be closed... stinkin kommies

August's picture

It's not "morality", just a sound business decision.

Manthong's picture

Ah, grasshopper.. now meaning is known of  "Grateful Dead” from youth.

..and middle age.


Bullionaire's picture

"I'll drink yer health...share yer yer life...steal yer wife!"

"You can call this song the United States Blues!"

Mr. Universe's picture

What a Long Strange Trip It's Been

de3de8's picture

Mofo: based on your premise I'd have a few other things on the "going out,guns blazing" list.

Arnold's picture

We wish to live longer than our children on some days.

markovchainey's picture

I like that WTFMOFO.  I've been thinking lately that if I were around 60 years old today I'd go back to school for a doctorate.  Borrow every single dime I possibly could, take 10+ years to complete the degree and then start paying it all back.  Since repayment is now based on income, and since all my income would be from SS I figure the monthly payment couldn't be more than $200/300 per month.  Fuck the banks, fuck Washington DC, and fuck the FED.

Shad_ow's picture

Yes, student loans can be had for tuition AND living expenses.  Can't be denied to elderly without age discrimnation, which is illegal.  Thanks liberals. 

Everybody Dance Now!

Sanity Bear's picture

Based on the record, the term "baby boomer" ought to be replaced by "debt boomer".

NoPension's picture

Some dipshit cc company gave my disabled, double amputee dad a card with a $50,000 limit. With cash privileges!
He bought lottery tickets, knives off of tv and other dumb shit.
When he died, there was no estate. As per plan.
Mom mailed the bill back with a copy of his death certificate. Hehe!

Pooper Popper's picture

reap it boomers,,,you started this shit storm,,,and you will reap the end!

Cruel Aid's picture

outside forces started this, where u been? They still have the mkts by the balls

ToSoft4Truth's picture

'outside forces started this'


Could it Be.....



Cruel Aid's picture

lol, thats exactly what i was thinking, not the fed. No way!

Edit, yea all this shit is boomers fault... thats a vote for Bernie, yea Bernie, the idiot populist.

Go fuck yourself dn voters! 

Louie the Dog's picture

I'm 67, home paid for, 2015 car paid for, no revolving credit card debt, money in the bank. And I made shit income most of my life. Not sure what you want me to "reap". 

g'kar's picture

excellent job dragging that 169% average down

JRobby's picture

Reap sanctuary from this ongoing shit show for a life well lived within your means. I for one commend you. 

Id fight Gandhi's picture

Good for you. In 7-10 years what if you need to be in a home? Talking 130k/yr on average easy plus medical costs. 5 year claw back for medical assistance.



Shad_ow's picture

"reap it boomers,,,you started this shit storm,,,and you will reap the end!"

Translation:  I blame someone other than those who are responsible because I am a good little sheep.  I believe the distractions being thrown out from those who are becoming fearful as their ponzi and theft are failing.

Delphi_Addiction's picture

Fourth turning, right on schedule...

Doesn't explain Gen X, though. But we (mostly) exited youth before affluenza took over. I also doubt Strauss/Howe could have foreseen Gen Y brains being destroyed by technology and social media. Not seeing 1980+ kids assuming their role as next Greatest Generation, as they predict.

Mellinnials occupying a fox hole on a SE Asian archipelago still just makes me laugh. When the grid goes down, and they cant post an update on FB, they'll be jumping off buildings within a week.

RopeADope's picture

There is some research out there that indicates that Gen X is highly skeptical of the narratives of other groups. One of the common explanations is that this generation is the latchkey kid generation that did just fine by looking after itself.

Canadian Renegade's picture

I think it is more likely that gen X is the first generation that either grew up with the internet or were still young enough to adapt to it. We still played outside though didn't we?

Older generations still get all their news from the TV so no wonder they are clueless. Younger generation are usually to preoccupied with games and stupid social media shit to pay attention.

I'm gen X and I read Alt media but no Facebook.

WTFMOFO's picture

Our generation (X) was about 50/50 in my mind.  For example, I joined the Army at 18, ended up being in combat during the 1st Gulf War.  Got out after 3 years and my best friend from HS still lived with his folks.  I then went to college and obained and engineering degree (Through the GI Bill and working at fucking Littel Ceasars full time).  Buddy from HS was still living with his parents.  I worked in corporate America until I started a small manufacturing company at age 29.  My buddy still lived with his parents.

I stopped over to see my buddy (at his parents house) ate age 30, I already had 12 employees and a small company that was taking off.  I told his parents that when they decided to have a child that they wanted the preciious little baby, not a grown man.  I told them that if they wanted a grown man living with them that they could have gotten a bum off the street 30 years ago and ended up at the same place without having to raise a kid.

I am now 45 and retired.  My buddy lives in a little house that his parents built for him on their property. My wife and I "made it", he simply refers to me as "the luckiest person alive" and that he wished he would have had the same opportunity in life.