Economists AnnaMaria Lusardi of George Washington University and Olivia Mitchell of the University of Pennsylvania recently studied the debt load of the Baby Boomer generation and found that the changing dynamics of the housing market have put many of these near-retirees in a financial bind.
The research showed how debt patterns are shifting across generations. Among those born in the 1930s, 40.5 percent had outstanding home loans in their near-retirement years. Among Boomers, that share rose to 47.8 percent. Especially problematic was the average size of the outstanding debt -- just over $26,000 for the 1930s group, but more than $66,000 for the Boomers. The housing bubble is chiefly to blame for boosting these balances to such heights.
Lusardi and Mitchell noted that, compared to older groups, many of the Boomers had been able to purchase more expensive houses with smaller down payments. This has left them with a more difficult-to-retire debt load. In addition, the researchers stated that 17 percent of the Boomers surveyed were underwater on their mortgages in 2008 and the following year.