Most retired individuals feel they have planned well for the future only to find that rising medical costs, damage done to their investment portfolios by the economic recession and other factors have caused them to go into debt. According to a national study, seniors are racking up debt like never before. Elderly individuals who are in debt live with a constant burden over their heads. Most are on fixed incomes and have no way of paying off credit cards and home equity loans that continue to mount to cover household budget deficits. In order to meet payments, seniors will often not purchase medications and skimp on food budgets. They pinch every penny in order to pay their obligations.
Most of these people worked hard their entire lives and managed their debt. They never anticipated the rising costs of prescriptions, expensive medical care or depletion of savings by living longer. But there are some options you have to assist financially.
Reverse Mortgages – a reverse mortgage is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person’s lifetime. Instead of making payments to the bank the bank makes payments to you. For those seniors who are less fortunate financially but own a home, a reverse mortgage can allow them to remain in the home by creating extra income.
Life Settlements – A life settlement enables older individuals, businesses and other organizations to sell life insurance policies they currently own, but no longer want or need for an amount greater than the cash surrender value. In some cases, the value can be two to three times the cash surrender value. Even some term life insurance policies with a conversion option to permanent coverage can qualify for a life settlement.
Government Programs – Some government programs such as food stamps provide temporary financial help for food. Other programs provide subsidized housing, help with medical expenses and provide tax credits. Area Agencies of Aging offices can offer individual counseling, help and advice.
There are knowledgeable professionals that can assist you in debt relief strategies and planning. The National Care Planning Council (www.longtermcarelink.net) has a list of advisors who can help you.