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National Retirement Risk Index

Planning for Retirement: The Implications of Carrying Higher Housing Debt into Retirement

Originally published September 2016

The financial profile of the typical American household entering its retirement years today is quite different than in generations past. In earlier generations, retiring employees were often eligible for employer-sponsored financial benefits, such as the guaranteed lifetime income provided by traditional pensions and retiree healthcare coverage. Households also typically drew two Social Security benefits in retirement - often a worker benefit and a spousal benefit based on the breadwinner’s work record.1 Most Americans sought to have their mortgage paid off by the time they retired, and households did not have easy access to refinancing options, home equity loans, lines of credit, or reverse mortgages.

Today, Americans bear a much greater financial burden. While some retiring workers still benefit from the income provided by a defined benefit pension plan, most employees are largely responsible for saving for their own retirement through defined contribution plans (e.g., 401(k)s) and other retirement savings vehicles. Retiree healthcare benefits are increasingly rare in the private sector, requiring households to fund their own healthcare costs in retirement beyond what is covered by Medicare. As households increasingly rely on dual incomes, Social Security benefits stand to replace less of the households’ earnings in retirement. Due to a greater access to credit, individuals are borrowing more over a lifetime, rather than just in early adulthood, in the form of student loans, credit cards, mortgages, home equity loans, home equity lines of credit, and reverse mortgages. As a result, American households are now carrying greater amounts of debt into retirement.2 This phenomenon is especially true for housing debt.

The latest National Retirement Risk Index (NRRI) research, which is produced by The Center for Retirement Research (CRR) at Boston College, examines the impact on retirement readiness of households’ increasing propensity to carry housing debt into retirement.



1 Butricia, Barbara, and Karen E. Smith, “The Impact of Changes in Couples’ Earnings on Married Women’s Social Security Benefits”, Social Security Bulletin, Vol. 72, No. 1, 2012, p. 6.
2 Brown, Meta, and Donghoon Lee, Joelle Scally, Katherine Strair, and Wilbert van der Klaauw, “The Graying of American Debt”, Federal Reserve Bank of New York, February 2016,

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