We’ve written before about how the vast majority of Americans have some form of debt. Some of it necessary (i.e., a mortgage or a car loan), while other forms of debt are less than ideal (paying high interest rates on a credit card or money owed on medical bills).
The less than ideal debt is part of the reason why the use of personal loans has grown, as people consolidate credit card debt and pay off medical expenses with them, among other things.
Now a recent report from American Funds suggests that as younger generations build up more debt, they could be carrying it all the way into retirement.
Consider the percentage of various generations with debt from Pew Research:
- Gen X: 89%
- Millennials: 86%
- Baby Boomers: 80%
- Silent: 58%
- See sources at the bottom of this article for the original reports
Generation X seems to carry the highest burden with a median debt amount of $104,000.
Will You Ever Retire?
While some may plan on retiring at 65, others at 55 and maybe some even dream of bowing out at 40, an Employee Benefit Research Institute study suggests dwindling confidence.
- 14% of current retirees retired at 66 or older
- Almost half of workers 55 and older expect to retire at 66 or older
- 11% of current workers under 55 say they expect to never retire.
- See sources at the bottom of this article for the original report
The American Funds report suggests people are retiring with more debt than ever, and that the younger generations are more likely to have a problem retiring.
What You Can Do Now That Could Help You Retire in the Future
Debt is a part of American life. It breaks down like this according to Pew:
- 80% of households have a median debt of $67,900
- 44% have mortgage debt (median of $103,000)
- 39% have credit card debt (median of $3,800)
- 37% have car loans (median of $13,000)
- 21% have education loans (median of $20,000)
- 21% have medical bills (median of $1,200)
- 21% have bank loans (median of $10,000)
In fact, 8% of Americans even have family loans, and we know that can sometimes lead to problems.
So how can you take action somewhat quickly to get yourself on the path to paying down debt?
Debt consolidation through a personal loan is a convenient option that allows you to take higher interest debts and put them into one payment with a regular schedule to follow.
Yes, a personal loan is a form of debt, but it’s often used to reduce the debt burden of financially responsible individuals.
How Much Will Debt Consolidation Help?
If you’re not sure about the value of consolidating debt, you may want to consider using one our personal loan calculator to see some examples of monthly payments and savings amounts. You can use our calculator to the right of this article as well, or at the bottom of this article if you’re on a mobile device.
You may also want to read our article on 3 important questions to ask about debt consolidation.
When it comes to retirement, there are many other sources you can seek out for guidance. The important thing is to keep an eye on your financial future.
Not everyone can have a perfect financial picture at any given moment – with the right amounts allocated for bills, retirement, debt reduction and emergencies – but beginning to take steps in the right direction is a great place to start.
Whether that’s simply saving money on a daily basis, planning for the long haul, or lowering interest payments on debt, you’re stacking the building blocks towards the next phase of your life financially.