Some Americans don't think they'll ever pay off their debt

A good proportion of Americans are not sure they will ever be able to pay off their debt.

About 15 percent of individuals expect to be in debt for the rest of their lives, according to a new study from Northwestern Mutual, which included data from more than 2,000 adults.

About 40 percent of people believe they will be in debt for up to 5 years, about one-in-five estimate between six and 10 years, while 12 percent projected a range of 11 to 20 years.

Part of the problem appears to be planning. The largest proportion of respondents said they were not sure what percentage of their monthly income goes toward paying down debt.

The average debt load for the general population, excluding mortgages, was about $29,800. Averages were slightly lower for Baby Boomers – at $28,600 – and higher for Generation X – $36,000.

Generation Z had already accumulated average debt loads of about $14,700, while millennials had average current debt amounts of $27,900.

Overall, the largest proportion of the population estimated their debt totals between $5,001 and $25,000 (exclusive of mortgage debt).

That being said, the biggest sources of debt were mortgage and credit card. Millennials reported having the largest share of credit card debt of any generation, only slightly outpacing Generation X.

On the plus side, 27 percent of respondents said they had no debt at all.

Americans’ debt loads have come into focus on Capitol Hill, particularly as the 2020 election cycle ramps up. A number of Democratic contenders have released proposals to entirely eliminate different types of debt – ranging from student loan debt (i.e. Independent Vermont Sen. Bernie Sanders and Massachusetts Democrat Sen. Elizabeth Warren) to medical debt (Sanders).

Mounting debt loads are one reason Americans are having a difficult time saving for retirement, too. According to a report from the Government Accountability Office (GAO), nearly 30 percent of people over the age of 55 have no retirement savings and no pension plan. Meanwhile, the personal savings rate has declined from 14.2 percent in 1975 to 6.8 percent in 2018.

Nearly one-in-four Americans don’t think they will ever be able to retire: Almost 30 percent of Baby Boomers between the ages of 65 and 72 were either working or looking for work in 2018 – the highest engagement rate for that specific demographic since the 1950s.


Labor force engagement was also high among younger baby boomers. About two-thirds of individuals age 54 to 64 were in the labor force in 2018.