A report on the December 11, 2002 edition of CBS' Early Show focused on the sharply rising debt levels of
people over 65. The report, which featured financial advisor Ray Martin,
cited data showing that between 1992 and 2000, people over 65 saw the amount
of their household debt triple.
In addition, the report and an
accompanying article on cbsnews.com listed other signs that debt levels are
becoming unmanageable for some older people. The article indicated that,
according to data from SRI Consulting Business Intelligence, more than 58%
of all seniors carried some debt last year, compared to 35% in 1992.
Moreover, credit card debt and bankruptcies among seniors are
escalating.
Martin, the on-air financial
advisor on Early Show, said that seniors' growing debt is traceable to,
among other things, low savings levels, high medical costs, and meager
cost-of-living increases for Social Security payments (for 2003, the
cost-of-living increase for Social Security is a scant 1.4%).
He said that many seniors may need
to consider reverse mortgages* on their homes as a way to help them; as
well, he suggested that cash-strapped seniors use affordability programs for
prescription drugs, apply for property tax relief (California does offer
limited property tax relief for low-income households), energy and
weatherization discounts, and the help of a debt counselor. Link
to Ray Martin article |
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Our Note: Reverse mortgages can be beneficial in some, but
not all, circumstances. For example, their use is questionable in cases
where the homeowner is not likely to be able to remain in the home for five
years or more.