Older Americans are carrying more credit card debt that young people, a research findings has revealed. In a study paper entitled “In the Red: Older Americans and Credit Card Debt,” presented by the AARP Policy Institute and Demos, it showed that older Americans are struggling with more credit card debt that young people. Old age comes with many challenges as it is the time when many retire to enjoy their after-retirement life.
This means that seniors loss their jobs through retirement and focus on living an old age life. In addition, this is the time when old persons start experiencing chronic diseases like diabetes, heart problems, and other conditions caused by low immune functions. In order to spend their last days well, seniors need to have a good financial security.
However, this is not case as many Americans are dying at old age with less than $10,000 in their accounts while others are dipping into their retirement benefits and exploiting them long before they die. According to the AARP Policy Institute and Demos report, those over 50 years were carrying a combined card debt of close to $8,278 in all their credit cards while those under 50 where carrying a combined debt of about $6,258.
Some of the contributing factors to the increased indebtedness of seniors are because after losing their jobs, they still have to meet expenses like home repair, medical bills, car repairs, insurance, utility bills, rent, mortgages, and food. However, one peculiar thing has been observed among seniors.
It has been revealed that seniors are helping their family members settle debts. What this means is that a good number of them are using their credit cards to support their adult children. This way, they are carrying a credit card debt that is not theirs. These old people are using their credit cards to obtain loans to pay for their adult children’s tuition fees.
About 25% of seniors are actually helping their family member to settle their debts. In this study, it was discovered that about 5 percent of student loans borrowed, they were taken by persons over the age of sixty. Only a handful of seniors at this age are surely in college if there are any. This means that these student loans were taken to meet college fees for their children.
However, students should bear the burden of their debts. They should take the loans and repay them when they are employed. Seniors seem to be willing to support their adult children not knowing the situation they are subjecting themselves into. When the burden of paying tuition fees is coupled with other expenses like home repairs and utility bills, this is far stretching the finances of the seniors.
What is happening is that these seniors are now dipping into their retirement savings and using their money to settle credit card debts. This is such a big mistake as the retirement benefits are the only financial security these seniors may have. Draining their retirement kits earlier could actually be creating serious financial insecurity at a time when there may be many problems that need financial support such as visits to the doctor and meeting utility bills.
This implies that seniors need to be educated on the reality of life after retirement and understand the challenges they have to go through including credit card debts and how they can avoid them. They need to refrain from taking responsibilities that they cannot afford. Supporting adult children to pay for college fees may be a sign for love and expression of emotional attachment, but does this has to be presented with material things like finances?
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