Manny Martinez lives in rent-controlled senior housing and watches his expenses. However, with all of his other bills going up, money from his Social Security—his only income—makes things rather tight financially for the 83-year-old. Sometimes he receives food from a church food bank where he volunteers. In fact, a new report from the National Council on Aging shows that more seniors than ever before a in financial straits many needing to borrow funds or go into debt just to meet their ordinary expenses."
The report found that borrowing by seniors has doubled their debt in the past decade, with more than 61% of households headed by an adult over 60 having some form of debt. Many factors could be a part of this new reality. Parents who have had their children later in life find themselves saddle with large mortgages in order to meet their children’s college expenses. All too often, seniors find that the idea of downsizing to a smaller home is actually more expensive than they thought incurring more expense than they intended to in their move (especially if it is to a CCRC). Losing your spouse income after their death while trying to maintain the same lifestyle is a not so uncommon problem for seniors as well; less income with all the same bills for taxes, insurance, household expenses, healthcare costs and other bills remain constant is a recipe for financial disaster.
The National Council on Aging report says that among older households with debt, the median total debt was $40,900 in 2013, which is more than double what it was in 2001. One third of senior homeowners owed money on a mortgage or home equity line of credit, with 30% owing payments that were more than 25% of their income. Seniors are also taking payday loans at a rate four times higher in the past five years.
The report, which includes the results of a survey of professionals who work with seniors, states that more than 90% said that medical debt threatened their clients' financial security. If this is a concern of yours, we can help you with identifying ways to meet long term care expenses. Why not call our office and schedule your complimentary consultation today?
Reference: The Daily Item (March 8, 2016) "New Report: More seniors falling into debt"