How Are Older Americans Coping Up With Debts?

Debts are ruling United States and there was a time when older Americans couldn’t think of retiring with a mortgage on their shoulders. But things have changed these days and debts are ruling every household in America.

Statistical data indicates that older Americans are financially burdened

• Studies reveal that older Americans are attaining retirement age with debt-to-asset ratio of 5.8%.
• Studies conducted by Employee Benefit Research Institute or EBRI state that 56% of households that have a 55 year family member heading the family had the same percentage of debt in the 2001 and 1992. Reports said that households owed as much as USD$39,000 in 2001 as compared to USD$27,500 in the year 1992.
• Americans in the age group of 65 and 69 had credit card debts worth USD$5,844 (on average). The percentage of older Americans between 65 and 74 and paying 40% of their monthly income to pay off debts escalated to 7.5% in 2001 as compared to 4% in the year 1992.

What are the factors contributing to rising debt load among older Americans?

Older Americans are facing the problem of rising debts that can be attributed to several factors. Some of the factors are as follows –

• Retirement related expenses are escalating. Once retirement age is attained, older Americas are being forced to shell out more cash for health care and also have to bear expenses that are unforeseen.
• There are very few senior Americans that are receiving pension checks from their employers.

However, not all older Americans are facing the same problem and the liquidity crunch that is being faced by older debtors differs from one household to another. You may also come across a household that is financially well off and have managed their finances very well despite having debts.

How do you handle debt load during retirement age?

You can take the following measures if you are not being able to manage your debts properly –

• Talk to your creditors directly and give them enough proof that you are facing financial hardship.
• In case you are not being able to decide which debt relief option will suit your current needs, talk to a credit counselor. The credit counselor will assess your financial condition and work out a budget so that you can manage your debts effectively.
• Since unforeseen events don’t warn you before they strike, save some cash that can act as cushion if you have to shell out extra money for an emergency.

Whether you belong to the older group of Americans or you have not attained retirement age, debt doesn’t discriminate according to age. The rule of money management skills is the same for all.