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Individuals appear to be getting extra severe about eliminating debt, and that could possibly be holding down their retirement financial savings.
Northwestern Mutual discovered proof of crowdout when it carried out a web based survey of two,740 U.S. residents ages 18 and older earlier this 12 months.
The proportion of individuals who stated that they had non-mortgage debt fell to 67% this 12 months, from 68% in 2019, earlier than the COVID-19 pandemic started.
Over that very same interval, the non-mortgage debt load of the common participant with debt fell to $21,800, from $29,803.
What It Means
For a typical survey participant, over the previous 4 years, about $8,000 in money that might have flowed into an IRA, a 401(ok) plan or an annuity was used to pay down debt.
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