The number of Americans age 60 and over in debt is alarming. A recent report by the AARP’s Public Policy Institute and the research organization Demos revealed that Americans over the age of 50 carried substantially more debt on credit cards — an average balance of $8,278 — than those under 50, whose average balance was $6,258. The Employee Benefit Research Institute also found recently that total debt payments as a portion of income for families headed by people 75 or older had shot up to 7.1 percent in 2010, from 4.5 percent in 2007.
Much of the credit card debt that older Americans have is tied to medical expenses; however, there’s a tangled and difficult generational psychology going on as well, putting too many seniors at financial risk just at a time when debt should be done with. Amy Traub, a senior policy analyst at Demos, reveals one situation in which emotional ties lead to financial knots. “Nearly a quarter of those aged 50 or above report that they gave money to or paid the debt of relatives, which added to their credit card balance,” she said.
Those apron strings can be like iron bonds. Connie Stone, a certified financial plannerwith Steppingstone Financial in Chagrin Falls, Ohio, is 55 and works with many retirees and near-retirees who just can’t let go.