Economists Annamaria Lusardi of George Washington University and Olivia S. Mitchell of the Wharton School of the University of Pennsylvania are evaluating changes in older Americans’ debt patterns across the generations.
When comparing Americans looking to retire in 1992 (those born during the Depression) and those of the same age in 2008 (Baby-Boomers), they find stark contrasts. Earlier cohorts had outstanding housing debt of around $40,000, while Baby Boomers owed close to $66,000 (both in $2008). The authors note that the housing bubble accounts for a large part of the difference. Boomers bought more expensive houses with smaller down payments, and close to a fifth of them were underwater on their mortgages as a result.
Read the full Market Watch story here at the Wall Street Journal