Retirement funds typically invested in real estate, stocks and mutual funds have been in freefall, causing those who are facing retirement or those who have already retired to take a huge hit. To complicate matters, like other adults, seniors have racked up huge credit card debt and tapped into their home equity.
A recent NYT Times article found that some of the reasons for seniors financial distress and resulting financial vulnerability are:
- Shrinking medical safety net makes retirees vulnerable to the rising costs of healthcare. Even those covered by Medicare often have huge prescription drugs costs.
- Many middle aged and seniors are caring for aging parents, which ratchet up their expenses and need for additional money.
- They often need money for home repair.
- They have often been hounded by aggressive brokers persuading them to take on more debt than they could handle or need.
In addition, many seniors faced the same temptations as other adults, and pulled money out of their homes for vacations, cars, and luxury items. Others saw an opportunity to buy investment property as a once in a lifetime opportunity. What they didn’t count on was the collapse in the home market, and so are now saddled with debut and unable to sell. Even those who didn’t gamble are victims of falling home prices and the stock market downturn.
–kyle–
