A record 4.2 million Americans are expected to reach retirement age in 2025, a transition bound to have ramifications on the overall financial marketplace for years to come.

Dr. Rikard Bandebo, Chief Strategy Officer and Chief Economist VantageScore®, recently spoke with The Wall Street Journal to provide insights into what retirees can expect in the coming years.

Those retirees without property or other significant assets are going to struggle the most,” he said.

“While the Baby Boomer generation as a whole is very healthy, with 80% in the Prime or Superprime VantageScore credit tiers. The disparate, “K-shaped” recovery seen in other parts of the economy might manifest in the retirement population, too,” said Dr. Bandebo.

Delinquency rates across credit products 60 to 89 days past due (DPD) among baby boomers (born 1946 to 1964) and the silent generation (born 1928 to 1945) are still lower than for millennials or Gen Z, according to VantageScore CreditGauge. Yet the delinquency rates of the silent, boomer and Gen X (1965 to 1980) generations have also been rising relatively faster than for millennial borrowers so far in 2024 through November, and the delinquency rate for Gen Z borrowers has fallen.

Likewise, the average utilization rate on credit cards has fallen through November this year for younger borrowers, but risen for the silent generation, and is down only slightly for baby boomers. This means that people are starting to use more of their available credit lines. That is good for loan growth and potential interest income for lenders—though it also could herald more future payback risk.

Most financial institutions can handle these trends,” Dr. Bandebo added. But a key to better predicting consumer performance will be “looking one level deeper at factors such as homeownership and bank account level trends.

Read more here: https://www.wsj.com/finance/investing/us-record-65-year-olds-economic-impact-8f5ea152?st=WKcxVf&reflink=article_copyURL_share