Posted on: Sunday, June 9, 2002

Debt a growing problem among seniors

USA Today

Once known for their thrift, older Americans are piling on debt — filing for bankruptcy in record numbers and jeopardizing retirement dreams.

Many live on little more than Social Security. A sluggish stock market and painfully low interest rates pinch returns on their CDs, bank accounts and stock investments. Tapped out, many in this new generation of seniors turn to credit cards to finance medical bills, expensive prescription drugs and comfortable lifestyles.

That isn't the way most people would like to envision their golden years. But debt problems are only likely to become worse as the population ages, bankruptcy experts say. Unlike their parents, Americans retiring now are comfortable with credit cards and debt. They are more likely to use plastic to make up for declining income from savings and investments.

As a result, household debt for those 65 and older is skyrocketing — up 164 percent on average in eight years, to $20,302 in 2000, according to SRI Consulting Business Intelligence. That compares with a 92 percent increase for those younger than 65.

Although older Americans account for a small proportion of total personal bankruptcy filings, they are the fastest growing group in bankruptcy. Roughly 82,000 Americans 65 or older filed for bankruptcy in 2001, up 244 percent from 1991, according to the Consumer Bankruptcy Project, a Harvard study.