Our chapter aims to analyze debt among pre-retirees and its implications for retirement well-being using data from three waves of the National Financial Capability Study (NFCS). In particular, we will analyze what kinds of debt people carry into older ages and how different types of debt are related to older Americans’ ability to save for retirement. Moreover, we will investigate older Americans’ understanding of debt and its consequences by analyzing their level of financial sophistication. For instance, managing debt can be especially difficult for people who do not know the power of interest compounding or do not have the financial savvy to plan for retirement or execute a retirement saving plan. Our analysis is intended to better guide financial sector practitioners as well as policymakers seeking to help older Americans better prepare for retirement and sustain a reasonable standard of living in retirement.
Debt Close to Retirement and its Implications for Retirement Well-being
