What Is The Average Debt By Age In America?

Debt is an inevitable part of adult life in America. Whether you’re buying a house with a mortgage or opening a new line of credit to rack up points for your next vacation, it’s natural to take on a certain amount of debt. Debt management is key to maintaining financial health throughout your life. But where do you stack up in comparison to your peers? And how can you reduce your debt?

How Many Americans Are In Debt?

It’s really hard to say how many people in the U.S. are in debt because no single entity tracks those numbers at an individual level. Rather, what you can see is the number of accounts and the total amount of debt. Of course, individuals typically have several accounts and loans they are paying at any given time.

Data from Experian™ shows that based on the average balances surveyed, 160,722,170 people carry debt. This was calculated by taking total debt and dividing by the average reported balance. Because this survey reports on average debts, it may underestimate the number because some people will have higher or lower debts.

It’s important to remember, too, that debt comes in many forms. There’s installment debt that you make periodic payments on, like a personal loan or mortgage, and then there’s revolving debt, where the balance changes as you use credit lines.

Here’s a breakdown of the debt carried by Americans across various categories according to Federal Reserve data. Note that although home equity lines of credit (HELOCs) are considered a type of mortgage, it’s broken out separately in Fed data:

• Mortgage: $12.014 trillion
• HELOC: $340 billion
• Auto: $1.582 trillion
• Credit card: $1.031 trillion
• Student loan: $1.569 trillion
• Other: $527 billion
• Total: $17.063 trillion

Trends In Debt Levels

With the exception of the second quarter of 2020 – when savings reached very high levels given pandemic stimulus — debt levels in the U.S. have increased every quarter for the last 3 years, according to the Quarterly Report of Household Debt and Credit from the Center for Microeconomic Studies at the Federal Reserve Bank of New York.

The latest report shows that total debt in the U.S. as of the second quarter of 2023 was $17.63 trillion, up 0.09% from the first quarter, but rising 5.63% since the same time a year ago.

This is expected, as goods and services continue to be more expensive over time. The Fed always wants a little bit of inflation because it incentivizes buying now, which adds more money to the economy. Inflation over the last year has been higher than the Fed (and the public) may like, making borrowing more expensive.  

Average Debt By Age

The quarterly report mentioned earlier from the Federal Reserve Bank of New York also breaks down debt levels by borrower age. The report notes that it may not add up perfectly to the totals because there are a certain number of people with an unknown birth year in the survey.

18 – 29-Year-Olds

• Credit card debt: $70 billion
• Student loan debt: $320 billion
• Mortgage debt: $500 billion
• HELOC debt: none reported
• Auto loan debt: $200 billion
• Other: $30 billion
• Total: $1.13 trillion

30 – 39-Year-Olds

• Credit card debt: $190 billion
• Student loan debt: $500 billion
• Mortgage debt: $2.57 trillion
• HELOC debt: $30 billion
• Auto loan debt: $370 billion
• Other: $90 billion
• Total: $3.75 trillion

40 – 49-Year-Olds

• Credit card debt: $230 billion
• Student loan debt: $350 billion
• Mortgage debt: $3.23 trillion
• HELOC debt: $70 billion
• Auto loan debt: $380 billion
• Other: $120 billion
• Total: $4.38 trillion

50 – 59-Year-Olds

• Credit card debt: $230 billion
• Student loan debt: $240 billion
• Mortgage debt: $2.76 trillion
• HELOC debt: $90 billion
• Auto loan debt: $330 million
• Other: $130 billion
• Total: $3.78 trillion

60 – 69-Year-Olds

• Credit card debt: $180 billion
• Student loan debt: $120 billion
• Mortgage debt: $1.86 trillion
• HELOC debt: $80 billion
• Auto loan debt: $200 billion
• Other: $90 billion
• Total: $2.54 trillion

70+ Year-Olds

• Credit card debt: $130 billion
• Student loan debt: $30 billion
• Mortgage debt: $1.08 trillion
• HELOC debt: $70 billion
• Auto loan debt: $110 billion
• Other: $60 billion
• Total: $1.48 trillion

Ways To Improve Your Finances And Reduce Debt

There are some basic things you can do at any age to improve your finances. Keeping an eye on your credit score factors and credit report can help you get a better interest rate when it comes time to borrow. However, the practical things you should do can vary by the stage of life in which you find yourself.

In Your 20s

Dealing with the intricacies of financial planning when you can barely think past college may seem daunting, but there are some actionable steps you can take in your 20s to reduce debt and set yourself up for financial success.

• Establish a budget. This will help you keep track of your spending and figure out how much you have left over after the bills you need to pay for things like extra payments toward debt, savings and splurges. If you feel overwhelmed, this is a good place to start.
• Start paying down existing debt. Beyond the minimum payments you have to make on things like credit cards and car loans, the more you can pay down your balance, the less interest you’ll pay over the life of your loans. Particularly important for those in college, if you have unsubsidized student loans, the interest on these accrues even in the times when you don’t have to make payments. So, making some kind of monthly payment will save you money in the long run.
• Start saving money each month. It doesn’t hurt to start setting aside money as early as you can because you never know when emergency expenses will come up. You’re never too young to start planning for retirement either, which leads me into my next point.
• Open a retirement account. When you’re in your 20s, you may think you can put off worrying about retirement because you’ll be working for the next 40 years or more. However, there’s no such thing as too early. If your employer offers a match and you don’t invest at least that amount in a retirement fund, you could be leaving money on the table.

In Your 30s

In your 30s, you start to settle into life. Your 30s are about building on what you started to set yourself up for future success.

• Avoid overspending. Now that you’ve started to make more income than you did when you were first starting out, you may be thinking you can splurge a little more and handle the credit card payment. But try to always be mindful of your budget. You have more resources, but you’ll want to judiciously apply them to your long-term goals.
• Count your credit lines. Stores are really good at offering things like 5% off that new bed if you sign up for their credit card. However, opening new lines of credit can also be a signal to the credit bureaus that you might be overextending yourself. Opening a new credit line could temporarily hurt your score. Be strategic about when you apply for new lines of credit and how many lines you hold overall.
• Is the loan necessary? It can be easier to do home improvement projects or afford a nicer car if you take on a loan. But you also don’t want to get stuck paying on something for a long time if you don’t absolutely have a need for it. Always evaluate whether the debt you’re taking on is furthering long-term plans.

In Your 40s

Once you’ve reached your 40s, believe it or not, retirement will be here before you know it. As you look forward to the freedom to do whatever you want, here are some things you might consider:

• Pay off your mortgage as soon as possible. When you get to retirement, one of the goals is to minimize your monthly payments as much as you can. For most people, the single biggest monthly expense they have is the house payment. Working to pay it off eliminates that payment and saves on interest. Check with your lender whether they have a prepayment penalty – Rocket Mortgage® never charges a prepayment penalty.
• Stick to your budget. There’s no hard and fast rule, but for many people, the longer they work in a career, the more money they are going to make. However, make sure you’re always eyeing your budget and those long-term goals. You can update your budget as frequently as you like based on your income and lifestyle.
• Continue building savings. It’s going to be important at this point to look at your current lifestyle and determine how much you would need to maintain that comfortably in retirement. Put as much away as you can to build toward that.

In Your 50s

In your 50s, you’re hopefully nearing retirement. Here are several things to think about:

• Try to avoid taking on large debts. New debts should be taken on sparingly at this point. If you take on a 30-year mortgage now, you’re committing to a long-term payment while also nearing a time in your life where you may have a more limited income.
• Pay off home equity loans. While these tend to have a shorter term than a primary mortgage, this is something you can work toward paying off prior to retirement to get rid of a large payment.
• Prioritize saving over spending. If you’re looking toward retirement in your 60s, now is the time to really get serious. If you haven’t been putting as much aside for retirement up to this point as you would have liked, the IRS often allows for catch-up contributions above and beyond the usual maximum if you’re over 50. Check with your tax advisor because the exact limits change every year.

In Your 60s

By the time you reach your 60s, you’re nearing or already in retirement. If you need to get your finances in order, there are a few things you could look at.

• If needed, consider postponing retirement. If you don’t quite feel comfortable giving up a paycheck in your current financial situation, you could consider putting off retirement for a while to get there. Just make sure you know where your goal is and stay laser-focused on it.
• Consider a debt management plan. A debt management plan involves working with a third party to structure a settlement with creditors so that you can pay your debt in increments at a more affordable rate, typically over a 3- or 5-year period. If possible, try to find a nonprofit to work with you on this.

In Your 70s And Beyond

If you’re in your 70s or later, hopefully debt isn’t much of a concern. But if it is, here are some strategies that might be helpful:

• Avoid taking on new debt. You’ll want to focus strictly on paying down the debts that you already have.
• Consider using savings to pay down existing debt. Obviously, this is going to depend heavily on what you have left over after your basic living expenses. But if you do have a cushion, paying down your debt could mean not leaving it for your heirs to deal with.
• Downsize your home. If you sell your existing home in downsize, you may be able to pay for your next home in cash and not have to worry about a mortgage or have one with a more minimal payment. This could also give you the opportunity to move closer to family.

The Bottom Line

Typically, debt trends upward over time across the entire economy just because it’s natural for there to always be some inflation. What really matters is the ratio between debt and income. It’s worth noting that at least in recent years, debt does tend to go down later in life.

If you’re not happy with your debt levels at this stage in your life, getting a budget together can help. You can also work on strategies to pay down your existing debt while not sacrificing long-term goals. Rocket Money^SM can help you make a budget and track your spending, and even cancel unused subscriptions. Download the app today!