Boomer Wealth Dented by Mortgages Poses U.S. Risk

[Purveyor]

By Victoria Stilwell Aug 28, 2014 10:04 AM ET

Mortgage-burning parties in the U.S. may be going the way of home milk deliveries and polyester leisure suits.

A growing number of homeowners are reaching retirement age still owing money on their houses. The share of Americans 65 and older with mortgage debt rose to 30 percent in 2011 from 22 percent in 2001, according to a May analysis by the Consumer Financial Protection Bureau based on the latest available figures. Loan balances also increased, with the median amount owed climbing to $79,000 from $43,400 after adjusting for inflation, the data showed.

“There were old-fashioned beliefs probably 30 years ago” that included “you should pay off your house before you retire,” said Olivia Mitchell, executive director of the Pension Research Council at the University of Pennsylvania’s Wharton School in Philadelphia. “This is no longer the case.”


The increase in mortgage debt may influence labor-force dynamics as some older Americans find they’re unable to completely retire, needing extra cash to keep up monthly payments. It also diminishes home equity and wealth, making these households more susceptible to swings in the economy and curbing spending on things such as vacations and visits to grandchildren.
Cutting Back

“When they are hit with a financial downturn or an unexpected cost, they often are in a position where they don’t have the ability to recoup whatever losses they may have suffered,” said Stacy Canan, the deputy assistant director of the CFPB’s Office for Older Americans in Washington. Because a larger portion of income has to go to paying a mortgage, “there has to really be a dialing back of almost all other expenses.”

more...

http://www.bloomberg.com/news/2014-08-28/boomer-wealth-depressed-by-mortgages-poses-u-s-spending-risk.html

[Warpy]

1. The 40+ year policy of depressing wages has had an incredibly profound effect

at all levels of the economy. With most people in this country making so little, taxes are not being collected, Social Security is not being funded, and this country's larger economy is in the toilet.

And no, most people are just a few paychecks away from disaster, even those earning 6 figure wages, because people think their paychecks will last forever and try to live up to them.

This country sucks for people who work for a living. That's the bottom line.

[msongs]

2. does not apply to war profiteers leeching off taxpayers thanks to our government nt

[Nay]

3. The 30-year policy of shipping jobs overseas made sure that boomers would

have to move 16 times to find other jobs. This makes it seriously impossible to pay off a house unless you are always going from expensive areas to cheaper areas. That was not usually the case. Moving eats up your money like crazy, and staying in an area can drop your wages like a stone.

Of course, it's all your fault, too, for not moving, or getting more (expensive) education, or for moving, or for what-the-fuck-ever. This country is a complete mess.

[love_katz]

4. + a gazillion...

for each of your posts.

And many of us don't even earn enough money to own a home/have a mortgage in the first place.

Retirement? What's that?