Making Your Money Last

Till Debt Do We Part: The Golden Years Are Tarnishing

Too many seniors today are weighed down with tremendous debt loads, but there are helping hands available. Check out these resources for assistance with everything from medical costs to rent, food and taxes.

Without appearing overly dramatic, we are in a crisis. A real one. “In the past decade, there’s been a steep increase in debt among households headed by someone age 75 and older,” according to reporting at CNBC. If you are 65-74 years of age, according to SmartAsset, you have an average household debt of $108,700. In fact, MarketWatch reports that, “Seniors have more household debt now than they did during the financial crisis.”

The good news is that we are living longer than ever before, but the bad news is that many seniors are economically insecure — living at or below 250% of the federal poverty level ($29,425 per year for a single person). “These older adults struggle with rising housing and health care bills, adequate nutrition, lack of access to transportation, diminished savings and job loss,” according to the National Council on Aging (NCOA).

Are we prepared to address these challenges faced by an aging population? My answer: NO. But the situation isn’t hopeless. There are many resources and strategies that people at risk can use to help themselves out.

What can be done? Help for those who need it.

The National Council on Aging and others direct seniors to programs that will help them economically. Some of these include:

  • Medical costs: NCOA can help individuals learn how to navigate the Medicare system and understand various options available under different plans. Plus, it will help them find discounts on prescription drugs and costs relating to dental and hearing programs. These discount cards are available to everyone. I actually work with Benefits911, a company that offers a discount prescription card. What distinguishes them, and impresses me, is that not only can cardholders get discounts on their own prescriptions, but some of the benefits are passed on to not-for-profits in the form of donations.
  • Medicare savings programs: Programs that can help qualifying low-income and disabled individuals pay their Medicare premiums and associated costs include Qualified Medicare Beneficiary Program, Specified Low-Income Medicare Beneficiary Program, Qualifying Individual Program and Qualified Disabled and Working Individuals Program. In order to qualify for any of these, you have to basically have an individual income of just over $1,000 per month, among other qualifications.
  • Food: NCOA can connect qualifying seniors with the Supplemental Nutrition Assistance Program (SNAP), where they can find food and nutritional advice available in their specific location.
  • Prescription assistance programs (PAPs): Most pharmaceutical companies offer patient assistance programs for low-income folks.
  • IRS help: Higher deductions and tax credits are offered for this lower-earning population by the IRS. You can refer to IRS Publications 524 and 502 for more details.
  • Rental relief: There is rental assistance for low-income families from several U.S. Department of Housing and Urban Development programs.

Practical tips can help, too.

  • Shop once a week: Make a detailed list and stick to it. This will help limit impulse buying. You can get your friends to split some of the big-box purchases, like paper products, as well, and this will save money on the goods and on transportation.
  • Everything is negotiable: If you have any debt outstanding, which could include credit card, student loan or mortgage debt, you can call the bank and try to negotiate lower rates.
  • Hit the library: You don’t have to buy books or pay to load up your readable device. These costs add up; your library will offer them for free.
  • Turn down the heat: You can turn off the heat in unused rooms and also get a programmable thermostat to make sure the heat is turned down while you are sleeping.
  • Dump your house phone: There is no need to have a house phone if you have a cellphone.
  • Whip out your discount card: Many places offer a senior discount; ask wherever you are.

What you should NOT do.

Of course, your goal is to retire with as little debt as possible, but if you find yourself in debt, don’t panic, because panic may cause you to do imprudent things. For instance, stay away from payday lenders who may offer you a quick fix. Payday loans are short-term cash loans that are based upon your personal check that the lenders hold for future deposit. They initially look like a way to get over a cash shortage, but you will have to pay finance charges, and interest rates approaching 400% aren’t uncommon.

Don’t take on more debt. I know you want to help your grandchildren with their college expenses, but taking on their debt can really add to your financial problems. Remember, your grandchildren can borrow on their own for college, you can’t borrow for retirement.

Just remember the words of Ogden Nash, “Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”

About the Author

Neale Godfrey, Financial Literacy Expert

President & CEO, Children's Financial Network Inc.

Neale Godfrey is a New York Times #1 best-selling author of 27 books, which empower families (and their kids and grandkids) to take charge of their financial lives. Godfrey started her journey with The Chase Manhattan Bank, joining as one of the first female executives, and later became president of The First Women's Bank and founder of The First Children's Bank. Neale pioneered the topic of "kids and money," which took off after her 13 appearances on "The Oprah Winfrey Show." www.nealegodfrey.com

Most Popular

Dying Careers You May Want to Steer Clear Of
careers

Dying Careers You May Want to Steer Clear Of

It’s tough to change, but your job could depend on it. Be flexible in your career goals – and talk with your kids about their own aspirations, because…
September 13, 2021
7 Best Commodity Stocks to Play the Coming Boom
commodities

7 Best Commodity Stocks to Play the Coming Boom

These seven commodity stocks are poised to take advantage of a unique confluence of events. Just mind the volatility.
September 8, 2021
5 Top Dividend Aristocrats to Beef Up Your Portfolio
dividend stocks

5 Top Dividend Aristocrats to Beef Up Your Portfolio

The 65-member Dividend Aristocrats are among the market's best sources of reliable, predictable income. But these five stand out as truly elite.
September 14, 2021

Recommended

You’re Being Robbed … You Just Don’t Know It
retirement

You’re Being Robbed … You Just Don’t Know It

For retirees especially, inflation risk should always be a top concern in your financial plan.
September 22, 2021
10 Ways You Could Avoid the 10% Early Retirement Penalty
retirement

10 Ways You Could Avoid the 10% Early Retirement Penalty

You’ve saved diligently in your 401(k), and you wouldn’t mind tapping into it – but you’re not age 59½ yet, so you could have to pay the IRS a 10% pen…
September 21, 2021
How to Calculate Your Net Worth
savings

How to Calculate Your Net Worth

Run an inventory of your assets and liabilities to find out how much you're worth.
September 20, 2021
What Is the Social Security COLA?
retirement

What Is the Social Security COLA?

This year especially, cost-of-living adjustments are late to the party, as consumers are feeling the effect of price spikes now.
September 16, 2021