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Older Americans Increasingly Burdened With Debt

OLYMPUS DIGITAL CAMERAFox Business reports that Americans 75 and older are becoming more saddled with debt than ever before.  “Retirement is supposed to be the “golden years” for older Americans, but massive debt is tarnishing that dream.” the report said.

Debt is playing a big role in “Boomers” retirement plans.

Baby Boomer are also affected, many are putting off retiring and continue to work past 65 because they need the money.

It looks like everyone will have to work longer and get by with less than expected.  The decline in the economy has had a lot to do with this phenomenon but I think it can more accurately be attributed to lack of financial planning and financial irresponsibility. I’m willing to bet you that most people approaching retirement age wish that they could get a do-over when it comes to planning for retirement.  When looking back, most people would likely want to do a better job of creating income that will continue for a lifetime.  Not to mention having the foresight to plan for the possible need for long term health care and being less dependent on Social Security.

This is yet another example of why it is important to become as debt free as possible.  I know that sometimes it is inevitable and there are things that we just can’t buy without incurring debt, but if you can keep your debt as low as possible, you will be able to save more of your hard earned income and hopefully be able to make sound investments for the future.

I guess you could blame it on a combination of procrastination and bad timing.

Many baby boomers are facing a personal finance disaster just as they’re hoping to retire.  Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.  With a higher debt load, these newly retired folks will be depending more heavily on Social Security, an institution I might add, that likely will not survive.

Many retirees banked on their homes as their retirement fund. But the crash in housing prices has slashed almost a third of a typical home’s value, now 22 percent of homeowners, or nearly 11 million people, owe more on their mortgage than their home is worth. …Many are boomers.

I think most of us if we could just go back in time or talk to the younger us, the one thing we could have done to be in a better financial position today, would be to just spend less of what we made and save a little more of it.

It looks like there is going to be a huge number of people that will face retirement with lower living standards than expected.

Too many of us have ignored or underestimated the worsening outlook for our personal finances.

I would say our biggest shortcoming was (is) the failure to save. I think the recession has actually helped some of us get back to saving.  If you have not found it possible to save more of your paycheck during these financially challenging times, here are a few tips that just might help:

  • Eat at home.  Sounds simple, but if you cut the dining out, you will see almost instantly an increase in your ability to save.
  • Cut Spending.  Another “no-brainer” that you might think you can’t cut anymore spending but take a good hard look and make sure.
  • Raise Insurance Deductibles.  If you feel comfortable raising your insurance deductibles, it surely can save you money on your policy.
  • Don’t be afraid to buy Generic.  Leave the brand loyalty at the door when it comes to shopping for groceries.  There are a few exceptions for some brand named items that are just heads above the generic.
  • Don’t run the water.  Turn off the water when you are brushing your teeth, shaving or washing your hands.
  • Cancel the Gym Membership.  There are plenty of ways to get a great workout at home.

All of these tips don’t sound like much, but the little things add up.  Try to save anywhere you can and you will start to see your efforts paying off.

Make eliminating your debt your first priority then start a savings plan.  It’s never too late to save money.

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