Major economic transformations often gather momentum slowly. That is, until accumulated data add up into clear signs of change. That’s the story arc of the more than three-decade-long rise in older Americans holding debt.

Older Americans are increasingly carrying debt into retirement, and the amount of debt is also on the rise.

“In 1989, about 58% of older adults over the age of 50 carry that in retirement. And in 2020, that percentage has jumped to 78%,” said Mingli Zhong, a senior research associate at the Urban Institute.

Owing money isn’t necessarily bad. Even upper income households, earning, say, $260,000 or more, take out loans to buy homes, cars and appliances. Young adults borrow to pay for their education and to start a family.

That said, the standard personal finance recommendation is to eliminate debt around retirement. Everyday life at older ages is financially riskier with debt, especially for people of modest means. Yet fewer near-retirees and retirees are debt-free.

“We’ve seen an uptick in debt, including mortgage debt, among older adults for a long time, for a couple decades now. It has to do with several factors,” said Odette Williamson, senior attorney with the National Consumer Law Center. “It has to do with cutback and some safety net provisions. It has to do with [the] increase in expenses, most recently due to inflation. And it has to do with the fact that older adults are aging with just fewer resources.”

The combination of debt and low savings among older adults is pushing more households into the ranks of the financially precarious. Three major factors are driving the trend.

“We found that the debt-creating institutions overwhelmed our wealth-creating institutions,” said Teresa Ghilarducci, a professor of economics at the New School of Social Research.

The value of home equity for the bottom 90% measured by wealth has barely increased over the past 40 years, Ghilarducci said. Lenders made it easier to borrow from home equity, lowered downpayment requirements and spearheaded other similar innovations. People also borrow to pay for the basics of modern life.

“People were able to also get car loans and other kinds of durable consumer purchases on loans rather than cash,” Ghilarducci noted.

Debt is also the other side of the lack-of-retirement-savings coin. Nearly half of private-sector workers and some two-thirds of lower-wage workers don’t have access to a retirement savings plan at work. Finally, wages rose slowly for most workers in recent decades — especially for Black and Latino workers, and for women in all categories. All the while, the costs of everyday living went up.

“I’m seeing the debt increase for everyone, but it’s a matter of whether you have the resources to deal with the debt,” said Odette Williamson. “And for those, especially people of color, older adults who have faced a lifetime of discrimination in the job market and other types of discrimination, they simply have aged with little or no resource to meet these mounting expenses.”

Nearly half of older adults surveyed by AARP use credit cards to cover basic living expenses. Toss in home-equity loans, medical debts, student loans, auto loans and mortgages. The accumulation of debt signals that too many older adults are living on a financial precipice.

The situation is reminiscent of these lyrics from Woody Guthrie’s “The Debt I Owe” sung by Lou Reed: “Every day, several times a day, a thought comes over me/ I owe more debts than I ever can pay back, more money than I’ll ever see.”

Hear or read the latest installment of Chris Farrell’s “Buy Now, Pay Later” series every Monday morning. This series is in partnership with Next Avenue, a nonprofit news platform for older adults produced by Twin Cities PBS.