What GAO Found
Americans age 50 or older had significantly more debt in 2016 than in 1989, according to GAO’s analysis of Survey of Consumer Finances (SCF) data.
- Debt. The share of older households with debt was 71 percent in 2016 compared to 58 percent in 1989 (see figure). The median debt amount for older households with debt was about three times higher in 2016 ($55,300) than in 1989 ($18,900 in real 2016 dollars) and the share of older households with home, credit card, and student loan debt was significantly higher in 2016 than in 1989.
- Debt stress. The median ratio of debt to assets—known as the leverage ratio, a measure of debt stress—for older households was twice as high in 2016 than in 1989.
- Adverse debt outcomes. Measures of older individuals’ adverse debt outcomes, including their share of mortgage and credit card debt that was late by at least 90 days, generally followed economic trends, peaking after the Great Recession of 2007-2009, according to GAO’s analysis of Consumer Credit Panel (CCP) data from 2003 to 2019. However, the share of student loan debt that was late was significantly higher for older individuals in 2019 than in 2003.
These trends in debt, debt stress, and adverse debt outcomes varied by older Americans’ demographic and economic characteristics, including their age, credit score, and state of residence. For example, from 2003 to 2019, individuals in their late 70s often had higher shares of credit card and student loan debt that was late than those aged 50-74. In addition, older individuals with credit scores below 720—including those with subprime, fair, or good credit—had median student loan debt amounts that were more than twice as high in 2019 as in 2003. Further, older individuals in the Southeast and West had much higher median mortgage and student loan debt, as well as student loan delinquency rates, in 2019 than in 2003.
Percent of Households Age 50 or Older with Any Debt (Left) and Median Leverage Ratio (Right) for These Households, 1989 to 2016
Note: The bars above and below the lines represent the bounds of 95 percent confidence intervals.
While older Americans’ overall debt and debt stress decreased as they aged, those in low-income households experienced greater debt stress according to GAO’s analysis of Health and Retirement Study (HRS) data, a nationally representative survey that follows the same individuals over time. The share of older households in this cohort that had debt continuously decreased as they aged, from about 66 percent of households in 1992 to 38 percent in 2016, and the median leverage ratio declined from about 19 to 13 percent over this period (see figure). However, low-income households in this cohort consistently had greater levels of debt stress than high-income households. This disparity in debt stress increased as these households aged.
Estimated Percent of Households with Any Debt for Those Born in 1931-1941 (Left) and Median Leverage Ratio for Those Households from 1992-2016 (Right)
Notes: The lines overlapping the bars represent 95 percent confidence intervals.
According to experts GAO interviewed, differences in debt type (that is, credit card versus housing debt) and debt stress levels will have varying effects on the retirement security of different groups. For example, experts noted that credit card debt has negative implications for older Americans’ retirement security because credit cards often have high, variable interest rates and are not secured by any assets. In contrast, an increase in mortgage debt may have positive effects on retirement security because a home is generally a wealth-building asset. Experts also said that older individuals with lower incomes and unexpected health expenses are likely to experience greater debt stress, which can negatively affect retirement security. Similarly, experts noted that the increased debt stress faced by low-income households is also faced by non-White households. Further, GAO’s analysis of data from the Survey of Consumer Finances found that in 2016, debt stress levels were about two times higher for Black, Hispanic/Latino, and Other/multiple-race households than for White households.
Experts GAO interviewed noted it is too early to evaluate the retirement security implications of the recession caused by the COVID-19 pandemic, in part because CARES Act provisions suspend or forbear certain debt payments. However, as with past recessions, the COVID-19-related recession may reveal any economic fragility among older Americans who, for example, lost jobs or cannot work because of the pandemic.
Why GAO Did This Study
GAO reported in 2019 that an estimated 20 percent of older American households aged 55 or older had less than $22,000 in income in 2016 and GAO reported in 2015 that about 29 percent of older households had neither retirement savings accounts (such as a 401(k) plan) nor a defined benefit plan in 2013. Older Americans held nearly half of the total outstanding debt in 2020—and these debts may affect retirement security. The Census Bureau projects the number of older Americans will increase.
GAO was asked to report on debt held by older Americans. This report examines (1) how the types, levels, and outcomes of debt changed for older Americans over time, including for different demographic and economic groups; (2) how the types and levels of debt held by the same older Americans changed as they aged, including for those in different demographic groups; and (3) the implications of these debt trends for the general retirement security of older Americans and their families.
GAO analyzed data from two nationally representative surveys–the SCF (1989 through 2016 data) and the HRS (1992 through 2016 longitudinal data)–and nationally representative administrative data from the Federal Reserve Bank of New York’s CCP (2003 through 2019). These datasets were the most recent available at the time of GAO’s analyses. GAO also reviewed studies and interviewed experts that GAO identified from these studies to further analyze the relationship between debt and retirement security.
For more information, contact Kris Nguyen, (202) 512-7215 or NguyenTT@gao.gov.
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- Department Press Briefing – March 15, 2021By Sam NewsMarch 15, 2021
- Eleven Defendants Charged with Murder in Indian CountryBy Sam NewsMay 14, 2021A federal grand jury in the Eastern District of Oklahoma has returned separate indictments charging 11 defendants with murder and other various violent crimes arising out of Indian Country.[Read More…]
- Special Representative Ambassador Jeffrey Travels to BelgiumBy Sam NewsMarch 9, 2020
- Burma (Myanmar) Travel AdvisoryBy Sam NewsSeptember 26, 2020Reconsider travel [Read More…]
- Federal Court Finds Florida Tax Preparers in Contempt for Violating Court’s Preliminary InjunctionBy Sam NewsJune 4, 2021On Thursday, a federal court in the Southern District of Florida held two individuals, as well as the company they allegedly co-own, in contempt for violating a preliminary injunction that restricted their tax preparation activities. The court’s order notes defendants “admit that sufficient evidence exists to hold them in contempt of court for violating the preliminary injunction.”[Read More…]
- Nord Stream 2 and European Energy Security By Sam NewsMay 21, 2021
- Operation Legend: Case of the DayBy Sam NewsSeptember 25, 2020A Bates City, Missouri, man was charged in federal court after law enforcement officers seized nearly two dozen firearms and illegal drugs from his residence.[Read More…]
- A New Video Captures the Science of NASA’s Perseverance Mars RoverBy Sam NewsSeptember 26, 2020With a targeted launch [Read More…]
- Jeffrey Lowe and Tiger King LLC Ordered to Relinquish Big Cat Cubs to United States for Placement in Suitable FacilitiesBy Sam NewsJanuary 19, 2021On Jan. 15, 2021, a federal court issued a preliminary injunction in favor of the United States and against Jeffrey and Lauren Lowe, Greater Wynnewood Exotic Animal Park LLC, and Tiger King LLC based on claimed violations of the Endangered Species Act and the Animal Welfare Act.[Read More…]
- 2020 Census: Census Bureau Needs to Assess Data Quality Concerns Stemming from Recent Design ChangesBy Sam NewsDecember 3, 2020The U.S. Census Bureau (Bureau) responded to COVID-19 in multiple phases. The Bureau first suspended field operations in March 2020 for two successive 2-week periods to promote the safety of its workforce and the public. In April 2020, the Bureau extended this suspension to a total of 3 months for Non-response Follow-up (NRFU), the most labor-intensive decennial field operation that involves hundreds of thousands of enumerators going door-to-door to collect census data from households that have not yet responded to the census. At that time, the Department of Commerce also requested from Congress a 120-day extension to statutory deadlines providing census data for congressional apportionment and redistricting purposes, and the Bureau developed and implemented plans to deliver the population counts by those requested deadlines. The Bureau implemented NRFU in multiple waves between July 16 and August 9, 2020, to ensure that operational systems and procedures were ready for nationwide use. The Bureau considered COVID-19 case trends, the availability of personal protective equipment, and the availability of staff in deciding which areas to start NRFU first. On August 3, 2020, the Bureau announced that, as directed by the Secretary of Commerce, it would accelerate its operational timeframes to deliver population counts by the original statutory deadlines. The U.S. District Court for the Northern District of California in September 2020 issued an injunction that reversed the Secretary's August 2020 directions for design changes and the Bureau's adherence to the statutory deadlines, but the Supreme Court ultimately stayed this injunction in October 2020 and allowed the Bureau to proceed with its August 2020 design changes. As a result, the Bureau shortened NRFU by over 2 weeks and reduced the time allotted for response processing after NRFU from 153 days to 77 days. GAO has previously noted that late design changes create increased risk for a quality census. The Bureau is examining ways to share quality indicators of the census in the near term and has a series of planned operational assessments, coverage measurement exercises, and data quality teams that are positioned to retrospectively study the effects of design changes made in the response to COVID-19 on census data quality. The Bureau is still in the process of updating its plans for these efforts to examine the range of operational modifications made in response to COVID-19, including the August 2020 and later changes. As part of the Bureau's assessments, it will be important to address a number of concerns GAO identified about how late changes to the census design could affect data quality. These concerns range from how the altered time frames have affected population counts during field data collection to what effects, if any, compressed and streamlined post-data collection processing of census data may have on the Bureau's ability to detect and fully address processing or other errors before releasing the apportionment and redistricting tabulations. Addressing these concerns as part of the overall 2020 assessment will help the Bureau ensure public confidence in the 2020 Census and inform future census planning efforts. As the Bureau was mailing out invitations to respond to the decennial census and was preparing for fieldwork to count nonresponding households, much of the nation began closing down to contain the COVID-19 pandemic. In response to the pandemic, the Bureau has made a series of changes to the design of the census. Understanding the chronology of events and the Bureau's decisions, along with the factors and information sources that it considered, can help to shed light on the implications and tradeoffs of the Bureau's response. This report, the first in a series of retrospective reviews on the 2020 Census, examines the key changes that the Bureau made in response to the COVID-19 outbreak and how those changes affect the cost and quality of the census. GAO performed its work under the authority of the Comptroller General to conduct evaluations on the 2020 Census to assist Congress with its oversight responsibilities. GAO reviewed Bureau decision memos, interviewed Bureau officials, and consulted contemporaneous COVID-19 case data for context on the Bureau's COVID-19 response. GAO is recommending that the Bureau update and implement its assessments to address data quality concerns identified in this report, as well as any operational benefits. In its comments, the Department of Commerce agreed with GAO's findings and recommendation. The Bureau also provided technical comments, which GAO incorporated as appropriate. For more information, contact J. Christopher Mihm at (202) 512-6806 or email@example.com or Nick Marinos at 202-512-9342 or by email at firstname.lastname@example.org.[Read More…]
- CEO of Financial Firm Pleads Guilty to Running Multi-Million Dollar Securities and Tax Fraud Scheme, and Operating an Unlicensed Money Services BusinessBy Sam NewsOctober 7, 2020A California-based man pleaded guilty today to conspiring with others to defraud shareholders of publicly traded companies, transmitting millions of dollars through the operation of an unlicensed money-services business in California, and falsifying multiple years of federal tax returns.[Read More…]
- Chinese National Sentenced for Laundering Millions for Mexican Drug CartelsBy Sam NewsSeptember 29, 2020A Chinese national was sentenced today to five years in prison and ordered to forfeit more than $4.2 million for laundering drug proceeds generated by large-scale cocaine trafficking in the United States.[Read More…]
- Information Security: IRS Has Improved Controls but Needs to Resolve WeaknessesBy Sam NewsApril 14, 2021No summary available.[Read More…]
- The United States and Ukraine: Strategic PartnersBy Sam NewsMay 5, 2021
- On the Extension of the New START Treaty with the Russian FederationBy Sam NewsFebruary 3, 2021
- Commercial Space Transportation: FAA Should Examine a Range of Options to Support U.S. Launch InfrastructureBy Sam NewsDecember 22, 2020Launch providers support the deployment of people and payloads, such as national security and commercial satellites or research probes, into space. The majority of these providers told GAO that U.S. space transportation infrastructure—located at sites across the country—is generally sufficient for them to meet their customers' current requirements. This situation is in part a result of the launch providers' investments in launch sites, along with state and local funding. Launch providers and site operators alike seek future improvements but differ on the type and location of infrastructure required. Some launch providers said that infrastructure improvements would be required to increase launch capacity at existing busy launch sites, while a few site operators said that new infrastructure and additional launch sites would help expand the nation's overall launch capacity. U.S. Commercial Launch Sites with Number of FAA-Licensed Launches, January 2015 - November 2020 The Federal Aviation Administration (FAA) was directed by statute to make recommendations to Congress on how to facilitate and promote greater investments in space transportation infrastructure, among other things. However, FAA's initial draft report was limited because it focused only on two existing FAA programs, rather than a range of options. FAA officials stated that they did not examine other options because of limited time and resources, and that the two identified programs could be implemented quickly because FAA has administrative authority to manage them. Leading practices in infrastructure investment emphasize the importance of conducting an examination of potential approaches, which can help identify how best to support national interests; avoid overlap or duplication of federal effort; and enhance, not substitute, participation by non-federal stakeholders. An examination may also help identify alternatives to making funding available, such as increasing efficiency and capacity through technology improvements. By focusing only on these existing programs, FAA may overlook other options that better meet federal policy goals and maximize the effect of any federal investment. Although FAA has already prepared its initial report to respond to the statute, it still has opportunities, such as during subsequent mandated updates, to report separately on potential approaches. Demand for commercial space launches is anticipated to increase in the coming years. FAA, the agency responsible for overseeing the sites where these launches occur, was directed by statute to submit a report—and update it every 2 years until December 2024—that makes recommendations on how to facilitate and promote greater investments in space transportation infrastructure. The FAA Reauthorization Act of 2018 included a provision for GAO to review issues related to space transportation infrastructure. This report discusses launch providers' and site operators' views on the sufficiency of infrastructure in meeting market demand and assesses the steps FAA has taken to identify options for federal support of space transportation infrastructure, among other things. GAO reviewed relevant regulations; assessed FAA's actions against GAO-identified leading practices; and interviewed FAA officials, commercial launch providers, and representatives from U.S. commercial launch sites that GAO identified as having hosted an FAA-licensed launch since 2015 or having an FAA launch site operator license as of August 2020. GAO recommends that FAA examine a range of potential options to support space transportation infrastructure and that this examination include a discussion of trade-offs. DOT partially concurred, noting that it would provide its mandated report to Congress but not conduct a new examination of a range of options. GAO continues to believe that such an examination is warranted. For more information, contact Heather Krause at (202) 512-2834 or KrauseH@gao.gov.[Read More…]
- 7 Things to Know About the Mars 2020 Perseverance Rover MissionBy Sam NewsSeptember 26, 2020NASA’s next rover [Read More…]
- Title X Family Planning Program Turns 50By Sam NewsDecember 18, 2020Title X of the Public [Read More…]
- The United States Sanctions Libyan Individual and Militia Connected to Serious Human Rights Abuse in LibyaBy Sam NewsNovember 27, 2020
- Al Qaeda-Trained Jihadist Who Recruited Other Inmates to Join ISIS Sentenced to 300 MonthsBy Sam NewsOctober 20, 2020A 46-year-old international terrorist convicted of additional terrorist activity that he committed while an inmate of the U.S. Bureau of Prisons has been sentenced in the Eastern District of Texas, announced the Department of Justice.[Read More…]
- United States Takes Action Against Violators of Religious FreedomBy Sam NewsDecember 7, 2020
- Welcome Progress Towards Elections in SomaliaBy Sam NewsMay 3, 2021
- NASA Space Laser Missions Map 16 Years of Ice Sheet LossBy Sam NewsSeptember 26, 2020Ice loss from Antarctica [Read More…]
- On the Loss of Life Due to Significant Flooding in Central VietnamBy Sam NewsOctober 22, 2020
- Assistant Attorney General Beth A. Williams Delivers Remarks at Columbia Law School Virtual Event on Combating the Online Exploitation of ChildrenBy Sam NewsOctober 28, 2020Good afternoon, everyone, and thank you for joining us today for a conversation on one of the most pressing challenges we face – the continuing fight against the online exploitation of children. I want to thank Berit Berger and Columbia Law School for hosting us virtually, and for putting together this event on such an important subject.[Read More…]
- Indiana Man Pleads Guilty to Hate Crime for Making Racially-Charged Motivated Threats Toward Black Neighbor and to Unlawful Possession of FirearmsBy Sam NewsFebruary 12, 2021The Justice Department announced today that Shepherd Hoehn, 51, pleaded guilty in federal court to making threats to intimidate and interfere with his neighbor, who is Black, because of the neighbor’s race and because the neighbor was exercising his right to fair housing, in violation of 42 U.S.C. § 3631. Hoehn also pleaded guilty to unlawfully possessing firearms, in violation of 18 U.S.C. § 922(g).[Read More…]