13 Tips to Help Seniors Manage Debt

Photo (cc) by schnaars

This post is from partner site LowCards.com.

The economy has taken its toll on many Americans, especially senior citizens who live on a fixed income. Social Security hasn’t had a cost-of-living adjustment since 2008, retirement funds are shrinking as stocks drop, and interest rates for CDs and savings accounts are at record lows.

A greater number of senior citizens are overwhelmed with debt, especially on credit cards and mortgages. According to Strategic Business Insights’ MacroMonitor, 39 percent of the homes where the head of the household was between 60 and 64 years old had primary mortgages, and 20 percent had secondary mortgages. In 1994, those figures were just 22 percent and 12 percent, respectively. Mortgage debt claims a large share of their income, and home values still haven’t recovered from the housing collapse three years ago.

The golden years of retirement have become a difficult struggle for many seniors.

Tips for seniors

  • If you are healthy enough to work, get a part-time job. More and more senior citizens must continue working because they can’t afford to retire.
  • Protect your finances against fraud or abuse. If someone else is buying your groceries or paying your bills, let a trusted third party monitor your bank account and credit activity. You can also give power of attorney to a trusted person who can oversee your financial affairs if you are unable to do it.
  • Limit your credit cards. One or two may be necessary for purchases; more than that is too many. It is too easy to run up debt on multiple cards.
  • Don’t use home equity loans to pay off credit card debt or to buy things that depreciate like trips, cars, and appliances.
  • Avoid debt-relief companies that claim to lower your credit card bills and monthly payments. Many of these are scams that charge high fees and leave you in worse financial shape.
  • If you need help, get advice from a trusted debt counselor. The National Foundation for Credit Counselors can help you find a credible counselor in your area. Call (800) 388-2227 or go to their website, www.nfcc.org.
  • If there is little hope of paying off your bills, bankruptcy may be the best of bad options. A Chapter 7 liquidation filing discharges unsecured debt but you may get to keep your home, pension, and retirement funds.

Tips for children of seniors

  • Investigate the finances of elderly parents and be ready to step in to help. Admitting mistakes or financial problems is difficult, and your parents may be hiding their debt. It may require monthly or quarterly meetings to go over income and expenses.
  • Will you assume financial responsibility for your parents in the future? This may be the time to buy long-term care insurance or open up a special savings account for these future expenses.
  • Do not co-sign credit card offers. If they have a card in their name, then you are not responsible to pay off your parent’s credit card debt, and their credit card debt will not transfer to you after they die. Do not co-sign for a credit card or other loans because you become responsible for that debt if they die or can’t pay it off.
  • Look for help from outside resources such as local governments, senior centers, churches, and other groups. You may find a nonprofit or an agency that offers financial relief to the elderly in the form of prescription drug assistance, subsidized bills, and even hot meals.
  • Get your siblings involved. Divide up duties and help pay bills.
  • Pay attention to your parents. Are there signs of memory loss or vulnerability to financial scams? You may have to take on more responsibility to protect your parents from bad decisions.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
How to Prepare Your Finances for Retirement in 7 Steps
How to Prepare Your Finances for Retirement in 7 Steps

Here is how to get your finances in shape for your golden years, one step at a time.

21 Purchases You Should Never Skimp On
21 Purchases You Should Never Skimp On

With some items, it makes sense to pay a little more rather than hopping on the lowest price.

8 Common and Costly Homebuying Myths
8 Common and Costly Homebuying Myths

Think you’re ready to buy a house? Don’t fall victim to these rookie mistakes.

Should You Hire a Service to Negotiate Your Cable and Other Bills?
Should You Hire a Service to Negotiate Your Cable and Other Bills?

Services like BillCutterz and BillFixers will negotiate your cable, internet, phone and other monthly bills in exchange for a share of the savings. I tried it: Here’s what happened.

8 Amazon Picks Under $30 for Coffee Lovers
8 Amazon Picks Under $30 for Coffee Lovers

We’ve brewed up a list of amazing Amazon products that are sure to perk you up.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

Why Cloth Masks May Increase Your Coronavirus Risk
Why Cloth Masks May Increase Your Coronavirus Risk

A new study finds that wearing a cloth mask can backfire if you don’t clean it properly.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.