Retirees Increasingly Spend their Golden Years in the Red
Higher costs of housing, medical care and utilities help sink seniors into debt
12:00 AM CST on Monday, January 15, 2007
By BOB MOOS / The Dallas Morning News
Miss Daisy has retired in the red.
When she adds up her monthly bills for her mortgage, car loan, electricity, gas, water and phone, they exceed her income from Social Security and a part-time job by almost $200.
"I rely on my credit cards to make ends meet," said the 65-year-old Dallas woman, who asked that her last name not be used. "I have no savings, so I have no choice."
She owes more than $7,000 on three cards.
Seniors who grew up in frugal times and have usually been reluctant to go too far into debt are turning increasingly to credit cards to make do in retirement, says a study by the National Consumer Law Center.
"Older people have generally held less credit card debt than younger consumers, but their generation is catching up," said Deanne Loonin, the principal author of the report by the Boston-based consumer advocacy group.
The study quantifies a trend that credit counselors have seen recently. It found that the average credit card debt for consumers 65 to 69 skyrocketed 217 percent over the last decade to $5,844. Researchers calculated the inflation-adjusted increase by examining Federal Reserve data on the assets and liabilities of American families.
The consumer advocacy group's report blames the trend on a combination of seniors' shrinking or stagnating incomes, higher expenses for housing, medical care and utilities, and creditor practices that push seniors to borrow.
"It's not just that elders have more debt than before, but that many are buried in unaffordable debt," Ms. Loonin said.
Late fees, phone calls
Daisy, who doesn't want her friends to discover her predicament, said she hasn't been able to pay anything on two of her cards since her utility bills increased last summer.
The late fees have added hundreds of dollars to her balances, and the frequent calls from credit managers have unnerved her. She said she can't afford the $150-per-month payments they insist she make.
"They probably think I don't care. Well, I do. I worry about my debts," she said. "I've worked my entire life, most of it six days a week, but I'm not sure I'll ever be able to pay off these credit cards."
The Rest of the Story.
12:00 AM CST on Monday, January 15, 2007
By BOB MOOS / The Dallas Morning News
Miss Daisy has retired in the red.
When she adds up her monthly bills for her mortgage, car loan, electricity, gas, water and phone, they exceed her income from Social Security and a part-time job by almost $200.
"I rely on my credit cards to make ends meet," said the 65-year-old Dallas woman, who asked that her last name not be used. "I have no savings, so I have no choice."
She owes more than $7,000 on three cards.
Seniors who grew up in frugal times and have usually been reluctant to go too far into debt are turning increasingly to credit cards to make do in retirement, says a study by the National Consumer Law Center.
"Older people have generally held less credit card debt than younger consumers, but their generation is catching up," said Deanne Loonin, the principal author of the report by the Boston-based consumer advocacy group.
The study quantifies a trend that credit counselors have seen recently. It found that the average credit card debt for consumers 65 to 69 skyrocketed 217 percent over the last decade to $5,844. Researchers calculated the inflation-adjusted increase by examining Federal Reserve data on the assets and liabilities of American families.
The consumer advocacy group's report blames the trend on a combination of seniors' shrinking or stagnating incomes, higher expenses for housing, medical care and utilities, and creditor practices that push seniors to borrow.
"It's not just that elders have more debt than before, but that many are buried in unaffordable debt," Ms. Loonin said.
Late fees, phone calls
Daisy, who doesn't want her friends to discover her predicament, said she hasn't been able to pay anything on two of her cards since her utility bills increased last summer.
The late fees have added hundreds of dollars to her balances, and the frequent calls from credit managers have unnerved her. She said she can't afford the $150-per-month payments they insist she make.
"They probably think I don't care. Well, I do. I worry about my debts," she said. "I've worked my entire life, most of it six days a week, but I'm not sure I'll ever be able to pay off these credit cards."
The Rest of the Story.
