Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



Our paper 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.


Older adults, debt, National Financial Capability Study, financial understanding

Working Paper Number


Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the author(s) and not those of the Wharton School or the Pension Research Council. © 2019 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.


The authors acknowledge research funding from the TIAA Institute and the Wharton School’s Pension Research Council/Boettner Center. They thank Paul Yakoboski for many helpful comments and remain responsible for any errors or omissions, and Yong Yu for programming assistance.

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Economics Commons



Date Posted: 20 September 2019