Wednesday, November 14th, 2018
Mortgage Debt in Retirement During 2000-2014
Using data from the 2000-2014 Rand Health and Retirement Study (HRS), the main objective of this study was to identify a profile of mortgage debtors among the retired elderly during the 2000-2014 period. This study focused on older homeowners who have retired from the labor force and who were 65 years or older. The descriptive results indicated that the percentage of households over 65 who were still holding mortgage debt was 15.4% in 2000, 16.1% in 2002, 16.5% in 2004, 16.5% in 2006, 17.0% in 2008, 17.4% in 2010, 17.4% in 2012, and 17.4% in 2014. The results of logistic regression analyses show that those with a larger family size, greater home value, higher outstanding consumer debt, higher education (some college or more), and Black were more likely to hold mortgage debt during retirement, compared with those with a smaller family size, lower home value, lower consumer debt, less education, and White. According to the findings of this study, there has been a rise in mortgage debt over the past decade, which could have implications for financial educators and policy makers. Because of the increasing costs of medical expenses and living expenses, monthly mortgage payments for the financially less savvy group could cause a financial burden or stress during retirement. While looking into retired elderly circumstances, personalized help might be necessary from financial counselors to meet the needs of those who do not know what to do about paying off their mortgages. Further, financial planners could develop and identify some strategic plans that could help or guide those who are holding mortgage debt with tax avoidance purpose, especially given the new tax law changes.