Going into retirement, near-retirees are looking at increased debt levels, which can offset any asset accumulations and reduce retirement income. By using data from the 2008 Health and Retirement Study (HRS), this study examines the debt and negative net worth of near-retirees. This study further investigates what factors are associated with the likelihood of holding consumer debt, holding mortgage debt, and holding home equity debt over holding no debt, and what factors are associated with the likelihood of holding negative net worth over holding a high level of net worth among near-retirees. The study sample includes 3,745 individuals between the ages of 51 and 64.
The results of the multinomial logistic regression analysis indicate that, all else being equal, human capital factors such as education, physical health problems, and depression symptoms play a significant role in predicting the likelihood of holding debt and negative net worth. In particular, education is positively associated with the likelihood of holding consumer, mortgage, and home equity debt over holding no debt, while it is negatively associated with the likelihood of having negative net worth over having a high level of net worth. Among the socioeconomic characteristics that influence the likelihood of near-retirees holding debt and negative net worth are household income, working in the labor force, and race. In particular, household income positively influences the likelihood of holding mortgage debt over holding no mortgage debt as well as the likelihood of holding home equity debt over holding no home equity debt. However, household income negatively influences the likelihood of having negative net worth over having a higher level of net worth.
The findings of this study could help financial educators, financial planners, and policymakers understand the differences in human capital and socioeconomic characteristics of near-retirees who hold some levels of debt over no debt and who hold no net worth or a lower level of net worth over a higher level of net worth. This study concludes that it is important for professionals, consumer educators, and financial planners to provide those who hold higher levels of debt and lower levels of net worth with financial literacy education; therefore, these individuals might be able to attain economic well-being in retirement.
| Identifer | oai:union.ndltd.org:UTAHS/oai:digitalcommons.usu.edu:etd-1937 |
| Date | 01 May 2011 |
| Creators | Brown, Susan M |
| Publisher | DigitalCommons@USU |
| Source Sets | Utah State University |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | All Graduate Theses and Dissertations |
| Rights | Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact Andrew Wesolek (andrew.wesolek@usu.edu). |
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