Instead of spending their golden years enjoying family, traveling, pursuing hobbies, or simply enjoying life, many seniors are having to struggle with crushing debt loads. According to the Employee Benefit Research Institute, a nonprofit organization, the number of senior households living with debt increased dramatically between 1992 and 2007. During that time, senior households with consumer and housing debt increased from about 54% to 63%. Also during that same time period, the average amount of debt that a senior household held increased by more than 100% to about $70,000, according to the EBRI.
These numbers are somewhat contradictory to the overall trend of decreasing debt amongst the average American household. However, while many families have recently decreased spending and debt, older Americans often face financial challenges different than those faced by younger families.
Many older Americans fall into debt because of crushing financial loss suffered after a spouse suffers an injury or illness. Additionally, many seniors are facing ballooning credit card payments. Amongst Americans age 65 and older, the average credit card debt load is about $10,235 as of 2008. In 2005 it was only about $8,100.
Some elderly Americans are also facing the prospect of paying for their child’s student loans. As the job market shrank and more and more younger Americans were unable to find a job and make payments on their student loans, the repayment duties fell more often to senior parents who had signed on as cosigners.
Because of all these financial pressures, adults aged 65 and over now make up the fastest-growing group of bankruptcy filers.
Michael Robinson, Estate Planning Attorney
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