USA Today, October 24th, 2010
have put their retirement dreams on hold as they face a dismal financial
reality: The recession has forced many into unemployment, stripped away
years of their savings or dramatically reduced incomes during what they
had hoped would be their final high-earning years.
“My generation thought that we were on easy street,” says Irene Froehlich, 61, who lives in the Chicago area. “All of a sudden, we have been hit hard.”
Froehlich, who works at home as an advertising
sales contractor for two magazines, saw her income drop 75% at the
beginning of 2009 because of declining ad sales. With less money, she
relied more on her credit cards, and the amount she owed jumped by 25%.
She filed for bankruptcy in May.
“I was backed into a corner, and I couldn’t pay
the bills any more,” Froehlich says. “It was not the way that I was
raised. I felt that I was a terrible person. But the economy has caused
this, and we’re paying the price.”
Even before the recession, older Americans were
piling on debt. From 2000 to 2008, the average debt for households
headed by people 55 or older nearly doubled to $66,000, according to
Strategic Business Insights, a consumer behavior research firm.
The ranks of older bankruptcy filers also have
been swelling rapidly. From 1991 to 2007, bankruptcy filings by those 65
and older increased by 150%, while filings in the 75-to-84 age group
soared 433%, according to the Consumer Bankruptcy Project.
Older Americans are staggering under debt because
of a variety of problems — from unexpected job losses late in life and
underemployment to overwhelming medical bills and providing financial
help to their children and grandchildren, analysts say. Making the issue
even more serious: They have little time to climb out of debt, says
Matthew Beatman, bankruptcy lawyer at Zeisler & Zeisler in Bridgeport, Conn.
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