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
Gen X (ages 43 to 58) not only carries the most debt on average of all the generations, but is also the debt leader in credit card and total non-mortgage debt.
What is the average debt by age in America? ›
Average credit card debt in the U.S.
| Q3 2023 | Q3 2021 |
|---|
| Millennials27–42 | $6,521 $6,521 | $4,576 $4,576 |
| Gen X43–58 | $9,123 $9,123 | $7,070 $7,070 |
| Baby boomers59–77 | $6,642 $6,642 | $5,804 $5,804 |
| Silent Generation78+ | $3,412 $3,412 | $3,177 $3,177 |
1 more rowMar 27, 2024
Gen X (ages 43 to 58) not only carries the most debt on average of all the generations, but is also the debt leader in credit card and total non-mortgage debt.
What generation is the most in 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.
Average American debt payment: 9.8% of income
The Federal Reserve tracks the nation's household debt payments as a percentage of disposable income. The most recent debt payment-to-income ratio, from the fourth quarter of 2023, is 9.8%.
What is a good age to be debt free? ›
"Shark Tank" investor Kevin O'Leary has said the ideal age to be debt-free is 45, especially if you want to retire by age 60. Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued.
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.
What is the average person's credit card debt? ›
Overall, the national average card debt among cardholders with unpaid balances in the fourth quarter of 2023 was $6,864, down from $6,993 in the third quarter. That includes debt from bank cards and retail credit cards.
What's the average credit card debt? ›
The average American household now owes $7,951 in credit card debt, according to the most recent data available from the Federal Reserve Bank of New York and the U.S. Census Bureau. But that's just the average.
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.
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 is the average credit card debt by age? ›
The average cardholder had $6,568 in credit card debt in Q2 2023, up from $5,963 in Q2 2022. Individuals 75 or older had the most debt ($8,100), and those under 35 had the least ($3,700). Alaska had the highest average credit card debt at $7,338; Wisconsin had the lowest average at $4,808.
What demographic has the most debt? ›
But the median debt-to-asset ratio for white families is 26.5%, while it was 46.8% for Black families, 46.2% for Hispanic families and 37.3% for other non-white races and ethnicities, an Employment Benefits Institute study found.
What percent of Americans live with debt? ›
Even though household net worth is on the rise in America (at $156 trillion at the end of 2023)—so is debt. The total personal debt in the U.S. is at an all-time high of $17.5 trillion. The average American debt (per U.S. adult) is $66,772, and 77% of American households have at least some type of debt.
What is the average credit score in the US? ›
What is the average credit score? The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
What is the average debt without a mortgage? ›
Key Takeaways. The average person with debt owed $21,800 outside of mortgages in 2023, according to a survey by Northwestern Mutual.
How much debt is normal for a 30 year old? ›
Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
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
In 2022, the average debt of consumers aged 65 to 74 was $134,950, according to the latest Federal Reserve data, compared to $94,620 for those 75 and older.
