The Employee Benefit Research Institute says the share of households headed by someone 55 or older with debt — from credit cards, mortgages, medical bills and student loans — increased to 68.4 percent in 2019, from 53.8 percent in 1992, according to a recent New Your Times article. Bankruptcy rates among older adults are also rising.
According to reporter Susan B. Garland, business cutbacks forced many older adults to retire earlier than planned, but also driving this rising debt load are soaring medical costs, the steep decline in pensions, growing housing expenses and low interest rates on savings. To make ends meet, many older adults are known to skip meals and to cut pills to stretch prescriptions, according to a survey by the National Council on Aging.
“Debt often forces them to make short-term trade-offs that can have a long tail on their overall health and financial well-being,” said NCOA President and CEO Ramsey Alwin, who shared her father’s financial struggles.
The New York Times interviewed several credit counselors who recommended selling a car that is seldom driven, applying for senior-oriented government benefits – such as property tax relief, utility assistance and Medicare premium subsidies – and shutting off support to adult children.
“If other cost-cutting options do not work, credit counselors say, a retiree could downsize to a smaller home or take out a federally insured reverse mortgage,” says Garland. Read the full article.