The average American household owes $10,000 in credit card debt, $58,957 in student loan debt, $241,840 in mortgage debt, and $22,612 in auto loans, per YF.
A survey conducted by PolicyGenius reveals that over 46% of Americans anticipate passing on debt to their heirs upon death. On average, U.S. households carry $10,000 in credit card debt, $58,957 in student loans, $241,840 in mortgage debt, and $22,612 in auto loans.
The study emphasizes that outstanding debt doesn't vanish after a person's demise; it is settled using assets such as property, retirement accounts, and bank accounts. Financial planner Rosalyn Glenn from Prudential emphasizes the importance of planning to manage debt to avoid leaving family members at risk.
The research indicates that households with incomes exceeding $150,000 tend to have higher debt levels than lower-income households. However, the study also notes that higher-income households are generally better equipped to assist their loved ones in settling these debts. Only 13% of the higher-income group reported having no life insurance, compared to 31% among lower-income households.
The study highlights disparities in homeownership rates, with Black homeownership standing at 45.5% and Hispanic homeownership at 48.6%, both trailing behind white homeownership at 74%. The housing boom, coupled with appraisal bias, has impacted Black homeowners' ability to refinance and benefit from equity.
Moreover, the survey identifies gaps in life insurance coverage. While 56% of Black Americans have life insurance, many are underinsured due to misconceptions about how life insurance works and a general mistrust of the industry. Hispanics lag further behind, with only 42% having a life insurance policy, often influenced by trust issues, language barriers, and cultural differences.
The lack of representation among financial planning professionals compounds these issues, with only 1.8% of certified financial planners (CFPs) being Black and 2.7% Hispanic. This underrepresentation highlights the need for more diversity in the financial planning sector to address the unique challenges faced by various communities.
