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Food and gasoline prices are rising. Home values are falling. Nearly 90 percent of Americans age 60 and older polled by MetLife Mature Market Institute said they are cutting back on their spending and more than half said today's economic conditions are worse than those they have experienced in the past. Seventy percent of respondents said they are cutting back on essentials like food and transportation and 17 percent reported having had to provide more financial assistance to family or friends as a result of the current economy.
To deal with these tough times, many older adults rely on their credit cards, which can make a bad situation worse. Debt counselors say older adults are using credit cards to charge necessities, like prescription drugs and groceries, not splurging on luxuries. According to a 2007 report by Demos, a public policy research group, the average credit card debt among people age 65 and older rose 194 percent, from $1,669 in 1989 to $4,906 in 2004. Those between ages 55 and 64 saw a 121 percent increase in debt to $5,916.
The fastest-growing group of bankruptcy filers in the United States are adults age 55 and older. They accounted for nearly a quarter of the more than 1 million Americans who filed for personal bankruptcy in 2007, an AARP study reported. The study also found that between 1991 and 2007, personal bankruptcy filings soared by nearly 151 percent among people 55 to 64 and by almost 178 percent among those 65 to 74. People age 75 and older saw the highest jump in filings - an increase of almost 567 percent over the 16-year period.
Researchers predict that this trend will continue as more people age 50 and older are still making mortgage payments and carrying higher credit card balances than ever before. These debts make them vulnerable to any other problem, including an illness, trouble with their pensions, loss of a job or an adult child or grandchild who needs significant help.
Recovering from bankruptcy can take years. Researchers at Ohio State University's Center for Human Resource Research say it can take people 12 years to catch up on their savings, compared with those who never filed for bankruptcy, and 26 years to recover their net worth. For older adults with fewer years in which to recover and rebuild a nest egg, this news is particularly troubling.
How can you get your finances back on track, if you are facing financial difficulties? Debt counselors suggest you:
If you are considering bankruptcy, the first move should be to talk to an experienced attorney who can explain the specifics. General advice includes:
Contact your area agency on aging toll-free at 1-866-243-5678 for the availability of legal help in your neighborhood. ProSeniors provides free legal information, advice and referral for Ohio residents, age 60 and older. Call 513-345-4160 or toll-free at 1-800-488-6070.
Twice each month, the Ohio Department of Aging delivers Aging Issues, a column from Director Barbara E. Riley that examines topics of interest to older Ohioans, their family members and others who care for and serve them. Aging Issues is intended for personal use as well as re-publication in newspapers, newsletters and other publications with older adults as a target audience.