Background

• Elderly people are under more financial pressure than ever before due, in part, to their fixed incomes not keeping up with rising inflation and not having enough money saved for retirement. This has caused more senior citizens to carry higher levels of debt, including mortgage debt, into retirement. Being saddled with so many financial obligations at a time when their incomes and earning potential have likely declined has resulted in record numbers of elderly people coming face to face with economic ruin.
  
  

Common Causes

• A life-changing event that often pushes many seniors living on pensions and Social Security over the edge is the death of a spouse. The death of a spouse receiving a pension could, in some cases, cause the surviving spouse to lose all that income. Social Security only allows a surviving spouse to receive one benefit check -- the highest of the two -- which might eliminate one half of the household income if both were receiving Social Security checks. It often results in the surviving spouse no longer being able to live at the same standard and become forced to rely on credit cards just to pay daily living expenses.
  
  

Options

• The outlook is grim for an elderly person wrestling with an onerous debt load on top of the rising cost of food, medical expenses and maintaining a household. She could either go back to work to increase her income or start selling off her assets and other valuable possessions to raise cash. Bankruptcy has been the solution for a growing number of senior citizens being harassed by creditors and afraid to even open the mailbox or answer the telephone.
  
  

Outlook

• The number of seniors struggling with financial problems is likely to grow. In a tough job market, it's harder for seniors to return to the work force, which makes it more difficult for them to increase their income as they get older. Elderly people are faced with a number of other challenges. Whatever savings they have is not earning much interest at the bank. Their investments may not be growing at the rate they had expected and the equity in their house might be lower due to falling home values or because they borrowed against the equity at some point.