Seniors Drowning In Debt
In Maryland and across the country, baby boomers and other older Americans are drowning in debt, say credit counselors and economists. A growing number of older people in our region are seeking financial assistance and help finding work, as well as filing for bankruptcy.
From 1992 to 2007, the percentage of households of people in their mid-50s and older with housing and consumer debt rose from 53.8 percent to 63 percent, according to the Washington-based Employee Benefit Research Institute's research using government data. The problem is even more acute for those 55 to 64, with 81.7 percent carrying debt.
Over the same period, the average overall debt for these 55-and-older households more than doubled, to $70,370, according to EBRI.
Health care bills are a leading factor contributing to the indebtedness of graying Americans.
Workers are paying more for employer-sponsored health insurance, while costs for medical care are skyrocketing. Eligibility for Medicare doesn't begin until age 65, and it does not cover such expenses as hearing aids, dental care and long-term nursing care.
Meanwhile, more older homeowners are carrying mortgage debt into retirement. Making matters worse, declining housing values have cut into what had been a safety net for older Americans and retirees: their homes.
Some older consumers also are saddled with credit card debt. Among Americans 65 and older, for instance, the average amount of credit card debt rose to $10,235 in 2008 from $8,138 three years earlier, the largest percentage increase among all age groups, according to a survey by Demos, a New York-based public policy institute.
While recent government data shows declining consumer debt as families cut back on spending and saved more money, not all older Americans can follow suit. Not only are most older Americans past their prime earning years, but many must dip into their savings to stay on top of bills — while those still working may make less than they did in previous years.Tags: consumer debt, debt, health care bills, Medicare, seniors