Personal debt in America had dropped 25% in 3 years, Northwestern Mutual finds – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Newswires
Topics
    • Life Insurance News
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Articles
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
Sign in or register to be an INNsider.
  • Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
  • Insider Pro
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Advisor News
Newswires RSS Get our newsletter
Order Prints
September 20, 2022 Newswires No comments
Share
Share
Tweet
Email

Personal debt in America had dropped 25% in 3 years, Northwestern Mutual finds

PR Newswire

At the early part of this year, personal debt among U.S. adults aged 18+ was on a three-year downward trajectory, according to Northwestern Mutual's 2022 Planning & Progress Study.

Among U.S. adults who carry debt, they held an average of $22,354 excluding mortgages in February when the research was conducted. At the time, inflation was rising but it was before the most recent spikes in the economic data. Nonetheless, the long-term trend line showed a 25% drop over three years.

Average Amount of Personal Debt (exclusive of mortgages)

Related stories

  • For some, nothing to fear from taking RMDs, professor says
  • Half of investors plan to work after retirement

2019

$29,803

2020

$26,621

2021

$23,325

2022

$22,354

"With inflation rising at the fastest pace since the 1980s, many Americans have seen their savings begin to erode and their debt levels rise in recent months," said Christian Mitchell, executive vice president & chief customer officer at Northwestern Mutual. "It's a challenging time for consumers but on the bright side is that many people have been chipping away at their debt for the last several years. It's a good reminder that a strong financial plan must factor in both what's happening now and what could be coming down the road."

The Drag Effect
Debt can create a drag on a financial plan that can be very difficult to reverse. The research found that nearly one-third (32%) of Americans' monthly income on average goes toward paying down debt other than mortgages.

Excluding mortgages (18%), the #1 source of personal debt by far is credit cards.

Sources of Personal Debt

Credit cards

20 %

Car loans

8 %

Personal education loans

8 %

Educational expenses for children / family members

6 %

Home equity loans / lines of credit

4 %

More than half (54%) of people say debt is having a substantial or moderate impact on their ability to reach financial security, and many Americans expect to stay in debt for a long time.

How Long People Expect to Be in Debt

1-5 years

43 %

6-10 years

20 %

11-20 years

12 %

For the rest of my life

12 %

Don't know

13 %

Debt has also caused people to hit pause on many of life's most meaningful milestones, including getting married, buying a house, having children and saving for retirement.

Things People Have Delayed as a Result of Debt

Making a significant purchase

31 %

Saving for retirement

20 %

Buying a home

18 %

Getting married

8 %

Having children

8 %

"When debt is carefully managed, it can play a helpful role in a long-term financial plan – but it's a slippery slope," said Mitchell. "It can be hard to detect when healthy debt turns into runaway debt, and once that line is crossed it can be debilitating over a long period of time. An advisor can help, whether it's by avoiding runaway debt in the first place or helping to get out of it once it's set in."

Americans Prioritize Paying Down Debt Over Saving
Between saving money and paying down debt, 57% of people prioritize paying down debt versus 43% who put saving first.

"Everyone's financial situation is different, but this finding does reflect intentions pretty clearly," said Mitchell. "This makes me optimistic that despite the challenges inflation poses, people are focused on getting their debt levels down over time."

About The 2022 Northwestern Mutual Planning & Progress Study
The 2022 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual and included 2,381 American adults aged 18 or older who participated in an online survey between February 8 – 17, 2022. Results were weighted to Census targets for education, age, gender, race / ethnicity, region and household income. Propensity score weighting was also used to adjust for respondents' propensity to be online. No estimates of theoretical sampling error can be calculated; a full methodology is available.

About Northwestern Mutual
Northwestern Mutual has been helping people and businesses achieve financial security for more than 165 years. Through a holistic planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what's most important. With more than $561 billion in combined company and client assets, $34 billion in revenues, and $2.1 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to nearly five million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. Northwestern Mutual ranked 97 on the 2022 FORTUNE 500 and was recognized by FORTUNE® as one of the "World's Most Admired" life insurance companies in 2022.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance). Not all Northwestern Mutual representatives are advisors. Only those representatives with "Advisor" in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.

Older

Arch MI’s HaMMR Predicts the Housing Slowdown Will Lead to a Soft Landing for Prices

Newer

The Enlyt Health Platform is Now Available for Payers

Advisor News

  • For some, nothing to fear from taking RMDs, professor says
  • Half of investors plan to work after retirement
  • Cetera to acquire Securian’s retail wealth business
  • Study: Education level should drive decisions on Social Security, annuities
  • Former California energy company exec given 5 years in prison for $15M investment fraud
More Advisor News

Annuity News

  • Investors scrambling to lock in rates propel annuity sales to record highs
  • North American and Annexus launch new fixed index annuity
  • Producers stew as insurers slow to process life and annuity applications
  • Substitute teacher wins massive lottery drawing in North Carolina. ‘Too good to be true’
  • Brad Rhodes: An annuity product many have never heard of
More Annuity News

Health/Employee Benefits News

  • Nearly half of all gig workers have no access to health insurance
  • California offers health insurance for $10 a month. The deadline is days away
  • Amazon announces service to deliver medications to your door. Here’s how it works
  • COVID-19Another COVID ‘new normal’: more Californians dying at home
  • Seven sentenced in conspiracy to defraud federal health insurance programs
More Health/Employee Benefits News

Life Insurance News

  • Cetera to acquire Securian’s retail wealth business
  • What does Curtis 'Cousin Eddie' Smith know in Murdaugh case?
  • Alex Murdaugh's murder trial starts with cellphones, bullets
  • Prosecutors, defense argue guns, bad acts in Murdaugh trial
  • Lincoln Financial Group offers new, fully automated life product, WealthAccelerate
Sponsor
More Life Insurance News
The time is 08:30:18pm test

- Presented By -

Top Read Stories

  • A Louisiana employer's health perks helped their workers lose weight. Here’s how.
  • US debt ceiling limit reached; Social Security, Medicare targeted
  • Former CEO of Texas beverage company sentenced to 10 years in prison for fraud
  • LETTER: FEMA flood insurance is all but worthless
  • Progressive online practices set example for agents, other carriers
More Top Read Stories >

FEATURED OFFERS

Grow life insurance sales in 2023 with middle-market clients

Tap a new source for sales and referrals with Allianz Life Insurance Company of North America.

Don't Miss ICMG 2023

When the success of your business depends on making the right connections, ICMG is the place to be.

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Articles
  • Monthly Focus

Top Sections

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2023 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • AdvisorNews

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.