More older Americans find themselves in debt - threatens retirement living

02-14-2015Retirement

As the economy appears to be a bit stronger, now is a great time to try and position yourself for a financially stress-free retirement. One of the best ways is to eliminate as many fixed costs – your home mortgage is the primary great target.

In the January 2015 edition of Employee Benefit Research Institute Notes, Craig Copeland, Ph.D identifies some disturbing news in "Debt of the Elderly and Near Elderly, 1992-2013." The conclusion: More older American families have debt.

• 4% of American families with heads ages 55 or older had debt
• 2% of these families have debt payments that greater than 40% of their income
• The average debt was $73,211
• Total debt payments as a percentage of income was 10%
• 42% of households age 65 to 74 had housing debt in 2013, compared with just 18% in 1992.
• Housing debt was the major component of debt for families headed by individuals ages 55 or older.
• The debt levels among those with housing debt have obvious and serious implications for the future retirement security of these Americans, perhaps most significantly that these families are potentially at risk of losing what is typically their most important asset—their home.

Morale – Turn your home into an asset by eliminating the liability a mortgage creates.