With rising health care and energy costs getting out of hand and the elimination of the traditional pension, retirement no longer holds out the guaranteed freedom it once did for many older Americans.
This trend has been worsened by the current recession and the drop in overall market values. Home values, stock portfolios, and job opportunities for older workers have been seriously affected.
The idea of having zero debt as a retiree is hardly realistic these days. While some retirees are fine paying down mortgage they are managing, others may rack up serious credit card debt buying investment properties, paying for vacation expenses, or buying luxury items.
Many senior citizens become overwhelmed with heavy debt that drives them towards bankruptcy or other financial difficulties. Debt advisors point out that there are hundreds of retirees that have ended up filing for bankruptcy since 2005, a fact that makes them a major demographic. Unfortunately, many were operating with limited assets in the first place.
More specifically, Americans 55 and older have been the largest age group to file for bankruptcy in recent years. They account for 23% of the more than 1 million filings in 2007, according to statistics released by AARP.
Laying aside bankruptcy cases, the sheer volume of mortgage and credit card debt among retired senior citizens is a cause for concern. According to figures compiled by the Employee Benefit Research Institute, 43% of people age 65 through 74 had mortgages in 2007 that carried a median housing debt of $69,000.
Largely, it is credit card debt that is an increasing problem for seniors who have limited or fewer resources. According to one study, credit card debt has risen 26% among those 65 and older since 2005.
Sat, Aug 29, 2009
Debt Management, Debt Reduction Advice, Getting Out of Debts