Our retirement is supposed to be a time when we can relax and enjoy the fruits of our lifetime labours. However, for many it is a time of financial worry and going without necessities. Many seniors are entering their retirement years with a large debt load which makes it even more difficult for them to make ends meet. Planning ahead in order to be debt free in retirement can be difficult.
What are the most common reasons seniors find themselves in debt?
- Rising cost of living. Many seniors live on a fixed income. While the amount may go up very slightly each year, the amount they are receiving can’t keep up with the rising cost of living. Seniors find themselves falling more and more behind as time goes on.
- Medical bills. If medical bills aren’t covered by a medical plan and the senior has to dip into savings, they can end up bankrupt if they become severely ill. In many cases the cost of medication also cuts into what little money the senior has for any extras, if they have any money left at all.
- Living beyond their means. Most seniors don’t realize that once they retire and are on a fixed income their style of living has to change, sometimes drastically. For those with little or no savings this can mean no vacations, few evenings out and not much in the way of entertainment. It also means that if they are used to helping out adult children or giving grandchildren lavish gifts, they will have to take away from spending on their own necessities.
For some seniors who are self-sufficient and have hobbies at home, retirement can still be wonderful on a budget. For those who see their older years as a time to have fun and travel, substantial savings will be necessary. To read more on financial considerations for seniors and handing debt, click here.