…you’re not alone! AARP recently published the results of a poll in which respondents were asked what proportion of their monthly income their monthly debt obligation amounted to. Nineteen percent of adults under 50 said they owed more than their monthly income! That’s almost one in five Americans.
We old buzzards weren’t much better off: 14 percent of people 50 and older were in the same boat.
Among the younger set, 24 percent saw about three fourths of their monthly income go to debt service, and 25 percent spent about half their income on debt. An incredible 26 percent of us dinosaurs said we spent 75 percent of our pay on debt.
Twenty-nine percent of the young things—more than a quarter, almost a third!—said they owed less than half their monthly income; 38 percent of survivors of the Cretaceous put our debt load at less than half of monthly income.
And…apparently the surveyors didn’t think to ask if anyone owed nothing. Too unlikely, eh?
IMHO, the most surprising element of this probably not very scientific survey was that over 1/4 of post-50s owed around 75 percent of monthly pay. Say what??? How could you possibly hit 50 or 60 or (hevvin help us) 70 and have to fork over 3/4 of your income to some lender?
Well…OK, two words: Edmund Andrews.
And no, I dunno how old he is. But obviously, if they included mortgage debt in this question (and there’s no sign they didn’t), folks who bought houses in the last three years or so are surely strapped.
In other categories, it’s not so surprising that old duffers are doing better than the rangy young pups: if you bought a house ten or fifteen years ago, what was once a breathtaking mortgage payment now looks pretty good. And most people hit their financial stride around age 50: typically people reach the peak of their earning power between ages 50 and 65. So if you earn more than ever before and you have an old mortgage, your debt ratio is probably lower…especially if you’ve been figuring you’d better shovel out from under the debt before you retire.
How about you? What proportion of your monthly income would you estimate your monthly debt to be?