People must take it upon themselves to stop spending more than they make and start saving.
New York, NY (PRWEB) June 27, 2013
GreyWingFinancial.com senior retirement advise site learned today that people over the age of 65 are finding that they’re saddled with mounting housing and credit card debt. In the CNN.com report from May 28 ‘Senior citizens struggle with mounting debt’ we learned that in 2010, the average debt held by seniors rose to $50,000. This number is up 83% since 2001, according to the Employee Benefit Research Institute, who extracted data provided by The Fed. GreyWingFinancial.com is concerned that seniors these days are carrying more debt than ever and offers finance advice to steer clear of this situation.
Why are seniors finding themselves in this position? The answer is more complicated than it first appears. In the aforementioned article we learned that the bulk of senior debt is housing related. By 2010, more than 45% of seniors over age 62 had housing debt, up from 24% in 2001. Craig Copeland, a Senior Researcher at the Institute said, “Virtually everyone borrowed more because of the availability and incentives…surprisingly, older people got the bug too.” Add into that mix the pervasive use of credit cards to cover living expenses and situation appears dire. GreyWingFinancial.com’s senior writer urges people to steer clear of living beyond their means and save. Things like Social Security benefits are not what they used to be. People must take it upon themselves to stop spending more than they make and start saving. As Globe Life and Accident Insurance Company pointed out on their website, right now Social Security benefits are equivalent to working full time (40 hours per week) and getting paid $6.40 per hour. Bottom line- people should start saving now because Social Security will not be enough.
If saving never happened and the debt is already there, relief can come in a number of ways. A reverse mortgage may be a solution for some seniors. Instead of paying a monthly mortgage payment, seniors convert the equity in their home into monthly payments or a one-time lump sum to themselves. The money received doesn’t get paid back so long as the senior is living in the home. Once the senior passes, the home belongs to the bank. "It can really dramatically improve the quality of life for many homeowners," says Bronwyn Belling, a specialist in reverse mortgages at AARP.
Additional relief options include everything from doing absolutely nothing and letting creditors sue and place a lien on the property (they cannot take the property) to filing bankruptcy. Whatever the situation, make sure that a professional offering big-picture financial advice is consulted prior to settling on any option.
GreyWingFinancial.com reviews the current dilemma of seniors carrying substantial debt and offers advice to obtain relief.
GreyWingFinancial.com offers important and timely information to seniors regarding all areas of their lives.