Americans’ debt levels tend to peak in middle age. Then, as people age and approach retirement, they typically have lower debt levels. That’s because they’ve had more time to pay down mortgage, credit card, student loan and any other debts they may have accumulated throughout life. For many Americans, a debt-free retirement is a dream that feels very far away, but it can be achieved with appropriate planning principles.
Do you have questions about how to manage debt for the future? Speak with a financial advisor today.
The Average Debt for People Under 35
Everythree years, the Federal Reserve conducts a Survey of Consumer Finances. In 2019, the survey found that the average debt for households that have debt and have a head of household aged less than 35 years old is $101,970. Not all householders in this age bracket have debt, which is why the Fed bases its average only on in-debt households.Mortgage debt on a primary residence in this age group averages $171,090.
The Average Debt for People Aged 35-44
Debt levels are higher for households with a head between the ages of 35 and 44. In fact, householders in this age bracket (who have debt) have the highest debt levels of any age bracket. Their average debt? $188,680. Average mortgage debt on a primary residence in this age group is $222,310.
The Average Debt for People Aged 45-54
It seems that household debt levels start to decline for householders between 45 and 54. The average debt for debtors in this age bracket is $177,030. It’s probably not a coincidence that the average salary for those in that age bracket is the highest for any age bracket.Additionally, the average mortgage debt on a primary residence for this group is $204,320.
The Average Debt for People Aged 55-64
Between the ages of 55 and 64, many Americans start to think about retirement. But among heads of household who have debt and are in this age bracket, average debt levels stand at $145,740. They might have assets in excess of this debt, but they might have negative net worth. In short, for some in this age group, lingering debt can be a reason to postpone retirement.
The Average Debt for People Aged 65-74
In a perfect world, you would be debt-free by the time you retire. That scenario is not realistic for many Americans, however. Householders in this age group who have debt carry an average debt of $105,250. Among those in this age group who have a primary residence debt,average mortgage debt is $152,890.
The Average Debt for People Aged 75 and Older
Seniors age 75 and older have by far the lowest average debt. Among those who carry debt, the average debt level is just $87,300. Seniors in this age group had some advantages over other age groups. Of course, they’ve had more years to earn money and pay down their mortgages. But they also benefited from a time when real wages were higher. They may even have pensions from their old jobs. And their wages probably weren’t affected by the 2008 recession.
Bottom Line
Homeownership is the primary source of both wealth and debt for many Americans. However, today’s younger Americans tend to have higher student debt, delaying homeownership. That means over the next few years and decades, we may see a shift in traditional patterns of average debt by age. Again, proper planning for debt management is essential to ensuring you don’t let debilitating levels of debt take over your financial life for years on end.
Tips for Managing Debt
- Including debt in your overall financial plan is very important, and a financial advisor can help with that.Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- When you have multiple loans and are trying to figure out how best to tackle them, you should usually prioritize paying them off in order of highest interest rate to lowest. The higher an interest rate you are paying on a loan the more expensive it in in the long term. So as a rule of thumb, it makes sense to prioritize debt from credit cards over student loan debt and then student loans over mortgages.
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FAQs
According to Experian, average total consumer household debt in 2023 is $104,215. That's up 11% from 2020, when average total consumer debt was $92,727.
What is the average debt by age in America? ›
Average debt by age
| Generation | Average total debt (2023) | Average total debt (2022) |
|---|
| Gen Z (18-26) | $29,820 | $25,851 |
| Millenial (27-42) | $125,047 | $115,784 |
| Gen X (43-57) | $157,556 | $154,658 |
| Baby Boomer (58-77) | $94,880 | $96,087 |
1 more row7 days ago
According to Experian, average total consumer household debt in 2023 is $104,215. That's up 11% from 2020, when average total consumer debt was $92,727.
How much debt is enough? ›
Ideally, financial experts like to see a DTI of no more than 15 to 20 percent of your net income. For example, a family with a $250 car payment and $100 of monthly credit card payments, and $2,500 net income per month would have a DTI of 14 percent ($350/$2,500 = 0.14 or 14%).
How many Americans are 100% debt free? ›
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
What age group is most in debt? ›
Credit Karma members closest to midlife carry the most average total debt. Generation X averages $61,036 in debt, followed by baby boomer members, who have an average total debt of $52,401.
At what age are people debt free? ›
A good goal is to be debt-free by retirement age, either 65 or earlier if you want. If you have other goals, such as taking a sabbatical or starting a business, you should make sure that your debt isn't going to hold you back.
What's the average credit card debt in America? ›
On an individual level, the overall average balance is around $6,501, per Experian's data. Other generations' credit card debt falls closer to that average or below. Here's the average amount of credit card debt Americans hold by age as of the third quarter of 2023, according to Experian.
What is the average age people pay off their mortgage? ›
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
What percent of Americans live with debt? ›
Even though household net worth is on the rise in America (at $141 trillion in the summer of 2021)—so is debt. The total personal debt in the U.S. is at an all-time high of $14.96 trillion. The average American debt (per U.S. adult) is $58,604 and 77% of American households have at least some type of debt.
Total debt on the balance sheet as of March 2024 : $9.91 B
According to Tesla's latest financial reports the company's total debt is $9.91 B. A company's total debt is the sum of all current and non-current debts.
What is considered a good debt? ›
In addition, "good" debt can be a loan used to finance something that will offer a good return on the investment. Examples of good debt may include: Your mortgage. You borrow money to pay for a home in hopes that by the time your mortgage is paid off, your home will be worth more.
Which generation has the most debt? ›
Key statistics
- People aged 40-49 hold the highest amount of debt with $4.21 trillion in total.
- By 2030, Millennials (born between 1981 to 1996) are expected to have the most total debt at an average of $228,891 per person.
Percentage of people who have more credit card debt than emergency savings, by gender and income
| Year income | Credit card debt | No credit card debt and no emergency savings |
|---|
| Less than $50,000 | 42% | 18% |
| $50,000-$74,999 | 39% | 4% |
| $75,000-$99,999 | 38% | 4% |
| $100,000 or more | 21% | 1% |
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Nearly one in four (22%) of U.S. adults have no emergency savings at all, Bankrate found—the second-lowest percentage in 13 years of polling. That's especially bad news given that most Americans would need at least six months of emergency savings to feel comfortable day-to-day.
How many credit cards does the average American have? ›
How many credit cards does the average person have? According to the latest figures from Experian, the average American has 3.84 credit cards with an average credit limit of $30,365. And their credit journey usually begins early, with the average Gen Z consumer having 2.1 credit cards.
At what age do most people pay off their house? ›
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
How much debt is normal for a 25-year-old? ›
Likewise, millennial consumers (ages 25 to 40) have an average of $27,251 in non-mortgage debt, presumably across credit cards, auto loans, personal loans and student loans.
What is considered a lot of debt? ›
Generally speaking, a good debt-to-income ratio is anything less than or equal to 36%. Meanwhile, any ratio above 43% is considered too high. The biggest piece of your DTI ratio pie is bound to be your monthly mortgage payment.
How much debt is normal at 50? ›
What is the average debt by age group in Canada?
| Age | Amount of debt |
|---|
| 35-44 | $105,100 |
| 45-54 | $130,000 |
| 55-64 | $80,600 |
| 65+ | $49,900 |
1 more rowFeb 22, 2024
