Many Americans have been forced to make sacrifices and change their plans because of the economic downturn. For seniors, the sacrifice they often are forced to make is delaying their retirement. For many, stagnant wages and excessive debts will keep them working for quite some time.
According to The Wall Street Journal, debt has caused many seniors to delay their retirement, as well as significantly cut back their standard of living. In many cases, the debt that is keeping them working is related to their homes - in 2010, 39 percent of household heads ages 60 to 64 still had a primary mortgage on their home, while 20 percent of people in this group had a secondary mortgage. And with the housing market crash, many of these seniors are paying more for their mortgage than their home is now worth.
"Relative to the value of their homes, the amount of indebtedness if anything has gone up because house prices have fallen faster than mortgages have been reduced," Christopher Herbert, the Director of Research at Harvard's Joint Center for Housing Studies, told The Wall Street Journal.
Even after the housing market rebounds, experts warn that it won't be smooth sailing for homeowners, and it may not be enough to relieve the financial hardships many individuals are experiencing.
"Prices aren't going to rebound back rapidly," economist Paul Dales told Bloomberg. "Most people think that when the downturn ends the recovery will be pretty good, but that's not going to be the case at all."
Another cause for the trend of delayed retirement is the stagnant wages that workers are paid, which, for 35 years, have not kept up with inflation. As a result, many seniors have used credit to supplement their incomes and have not been able to save money for their retirement. In many cases, workers have been forced to dip into their retirement funds just to pay credit card debts and make ends meet.
If you are a senior feeling buried in debt, consider contacting a bankruptcy attorney to discuss your options. A knowledgeable lawyer can advise you of the best course of action to alleviate the financial strain you are experiencing.
