America’s debt epidemic spreads to the elderly
Study shows the need for financial planning has never been greater
Today’s seniors are living longer — and that means they have more time to watch their debt skyrocket due to a rising cost of living and a lack of savings to cover lengthy retirements. A recent study by the Employee Benefit Research Institute (EBRI) shows an alarming rise in the number of seniors living with mounting debt loads, reports “The Chicago Tribune.” For example, EBRI’s study found the following based on 2004 data: 61 percent of family heads of household age 55 and older had some debt—up 7 percentage points since 1992; 40 percent of family heads of household age 75 and older had debt—compared with 32 percent in 1992; $51,791 is the average family debt of people age 55 and older — a 76 percent increase since 1992; $20,234 is the average family debt among people age 75 and older — representing over a 100 percent increase in just 12 years; 11/6 percent of income went toward debt payments in households headed by someone age 55 to 64; and 7.7 percent of income was directed to debt payments in households headed by someone age 75 and older.
Not surprisingly, then, the Tribune reports that almost nine to 10 credit counselors have taken on more elderly clients in recent years.
And EBRI’s study concluded that families with the oldest heads of household are now “the only age group that had higher non-housing debt payments than housing payment,” in 2004.
The bottom line: Increasing property taxes, and costs for housing, energy and medical services are all unavoidable reasons for the rising tide of elder debt. But financial planning and counseling can help, the Tribune says.
For information on handling debt, visit the Federal Trade Commission’s website: www.ftc.gov/credit.
