In our previous post, we began a sobering discussion about retirement and the debt struggles that sources report are putting many older Americans’ retirement dreams on hold.
At least one big contributor to the stresses facing those who thought they’d be able to retire is the reality of decreased home values versus how much some owe on their mortgages. Many older Americans bought their homes and have believed all along that their homes were their nest eggs, eggs that they would sell for profit once retirement age approached. For many, retirement age is near, but their homes are not near the values they’d need to be to help with retirement.
Financial professionals claim that while no one could know that the economy would wind up where it is, much of the consumer population has contributed the financial woes they currently face. Sources suggest that Americans got wrapped up in a culture of spending, wherein building debt was accepted and even encouraged. In recent years, consumers’ tendencies to build credit card debt, take out loans and refinance their homes are catching up with them at a time when they believed they’d be able to finally slow down.
In order to save effectively for retirement, want-to-be retirees have generally contributed more to their retirement accounts when they near their age when they want to stop working. Now, sources claim that those who are getting close to retirement age are not only contributing very conservatively to their retirement, but some are even borrowing against their retirement accounts in order to pay off various debts. The rate of those who have borrowed from their retirement went up a reported 18 percent between 2009 and 2010.
Surely, everyone hopes that someday, they will be free from the anxieties of debt. All hope is not lost for older Americans still struggling with debt, but research does suggest that intensive planning or legal support is crucial today for those who still dream of living a relatively stress-free retirement after having worked so hard over the past decades to do so.
The Wall Street Journal: “Debt Hobbles Older Americans,” E.S. Browning, Sep. 7, 2011