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As our society grows older, the financial burden looms.
While there are plenty to choose from, unfortunately, the impact of an aging population may be the most significant challenge we face. From healthcare to retirement, social services to housing, as the average life expectancy grows and the roles and needs of our seniors change, this massive demographic shift is already causing cracks in the faultline of our economy.
But it was only a decade or two ago that the thought of seniors needing to carefully manage their credit scores, credit card debt, and student loans was virtually unheard of.
In this ongoing series, Nationwide Credit Clearing will dissect some of the facts, stats, and financial trends among seniors in the U.S. Aside from offering this education, we really want to help, so any senior can contact us for a completely free consultation and credit report.
10 Facts, stats, and trends in senior finances:
1. Between 2007 and 2016, the percentage of senior households (with members 75 and over) grew from 31.2% all the way to 49.8% – or nearly half.
2. The amount of debt is also skyrocketing in the average older households, from $30,288 in 2010 to $36,757 in 2016. In fact, among older households with debt, the median total has risen more than 2.5 times since 2001!
3. Likewise, in 1992, only 41.5% of senior households had any debt, but that number has now risen to 60%.
4. More than 40% of single adults also count on their monthly social security check for 90% of their living expenses and income. The amount of that check? Only $1,404, on average.
5. Medical debt is one of the fastest growing financial burdens. Consider that 84% of people 65 years or older face at least one chronic condition. But insurance is covering less and less of the cost for their care, so in the five years leading up to their death, the average senior racks up $38,00 in medical (or medical-related) debt, and 1 in 4 approach bankruptcy.
6. Even credit card debt is on the rise among seniors. In 2001, just less than a quarter (24.2%) of seniors had any credit card debt at all. Now, more than 1 in 3 (34.2%) carry balances on their credit cards that aren’t paid off monthly. In fact, seniors hold 50% ore credit card debt than members of Gen Y!
7. You may be shocked to hear that the fastest form debt among seniors is student loan debt! It’s true, as these days, 2.2 million Americans 60 or older are responsible for student loans. However, it’s not that these industrious seniors are going back to school. Instead, they’re cosigning for their children or grandchildren at rates that have tripled since 2005. And with minimum student loan payments averaging $700 a month and the younger generation having a harder time making ends meet or defaulting more and more, these seniors are assuming the financial burden.
8. The financial picture for more and more seniors is bleak. In fact, one-third of all senior households either is going into debt every month to pay basic living expenses, or just breaking even.
9. Even more distressing, 25 million Americans ages 60 and up are considered economically insecure – which is living at or below 250% of the federal poverty level (that comes to about $29,425 for a single person.)
10. If we look at the data on credit scores, we see that seniors have the highest credit scores of any generation. In fact, the average FICO for all consumers 70 and over is 747, while 60-69 year-olds have an average FICO of 722 (and it goes down to about 640 for those 18-29.)
However, that doesn’t tell the whole story, as seniors are now defaulting on their financial obligations and debts at an unprecedented rate. Facing massive healthcare costs and medical bills, rising credit card and student loan debt obligations, and a shortfall from social security and retirement planning, seniors are now in need of some credit score help like the rest of us.
Look for part two in this series about the financial burden that comes with aging. And remember that we really do want to help, so any senior can contact us for a completely free consultation and credit report.