When people think of debt, the first image that generally comes to mind is the 20-something-year-old eating ramen and sleeping on a futon in an apartment shared with three roommates. It’s almost nostalgic.
The reality is that millions of Americans of all ages are living with debt, and new data from the Employee Benefit Research Institute found that 50% of seniors aged 75 and older have outstanding debt. In 1992, that figure was just 25%. Even worse, the harsh reality is that more and more lower-income seniors are turning to credit cards to make ends meet.
The trials of young debt are softened by the hope for a better tomorrow as our prime earning years have yet to come. Debt in old age, however, is a more concerning situation because seniors have limited income. The average Social Security recipient collects under $17,000 a year, while the median debt level of those 75 and over tops $20,000.
Of course, the best way to enter retirement is debt-free. Maybe that means working a while longer than you had planned, or maybe it’s trimming your budget. It definitely entails paying off your debts as much as you can as soon as you can—before you leave the work-force and start living off your well-earned savings. Start with credit cards as they typically carry the highest interest rates.
The goal is to enter retirement with a clean slate so you can enjoy your golden years without the stress that accompanies debt. You want to be the kind of grandparent who encloses 10 and 20 dollar bills in greeting cards—not the kind who needs another loan.
The information on this page is provided for educational purposes only and is not tax, legal, financial planning or investment advice. Neither the information nor any opinion expressed in this section constitutes an offer to buy or sell any securities or advisory products. The information provided is general and is not information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. You should not regard this information as a substitute for the exercise of your own judgment. Investing involves risk.