It was once the rule that those nearing retirement would be debt-free before moving on to the next phase of their life. Regrettably,  times have changed dramatically for later in life workers who now are burdened with student loans, mortgage debt, revolving credit, and car payments just as they are preparing for retirement.

Per capita debt among 65-year-olds increased by 48% between 2003 and 2015, according to the Federal Reserve Bank of New York. Of all types of debt mentioned, student loans were the biggest culprit (both for the individual and a family member), with the per-capita student loan burden increasing 886% for 65-year-olds during that time frame. Second to student loans was mortgage debt, increasing 47% for those approaching retirement.

We read frequently how good this economy is, but as we’ve written in previous blogs, family wealth has deteriorated substantially since 2007, with only those ranked in the top 10% by income achieving any growth in family wealth. The bottom 80% have actually seen their wealth decline by roughly 25%. Accumulating debt has obviously been the course chosen in order to make up for this shortfall in wealth.

Couple this debt accumulation with the fact that most retirees will only have access to Social Security and a DC plan balance. As we reported yesterday, the median account balance for a participant at Vanguard is only $79,000, and roughly 50% of our population doesn’t even have an employer-sponsored plan. Unfortunately, remaining in the workforce is not always the employees choice. Just how many of our Seniors will actually find part-time work to supplement their retirement benefits?