Posted Nov 23, 2021 by Martin Armstrong
It is a depressing reality, but around 73% of Americans will die with debt, according to a 2016 poll by Credit.com. The average amount of outstanding debt at the time of the report was an alarming $61,554.00 per person. Around 68% of those studied had credit card debt, 37% had mortgage debt, and 6% died with student loans. US household debt has spiked significantly since this survey was taken, and at least three in four Americans will die without the ability to pass on their lifelong earnings to their kin. Survivors likely will not need to pay off the debt as creditors will confiscate any available assets.
Let’s not forget that dying in the land of the free is anything but free due to death and estate taxes. Americans feel more optimistic about the situation than they should — only 30% of Americans polled during a 2017 survey believe they will die with outstanding debt. Credit card debt was once an indication that people were living well beyond their means, but with the accelerated cost of basic living necessities, the gauge is less plausible. This is one of the many reasons why financial literacy is absolutely crucial to maintain financial independence throughout life. It is possible to rise above debt, but most do not. As inflation continues to wreck every sector, it is of the utmost importance that people budget and allocate funds appropriately.
However, inflation will also reduce the out-of-pocket revalue of previous debt. This survey appears to be based on the presumption that everything remains equal. The greater risk will be the hike in state and local taxes, in additional to federal.