Rest assured seniors, if you think Social Security will carry you to the end even if you don't have a huge mortgages, then you have been Gruberized. But to carry a huge mortgage into retirement is not in your best interest, worse it will the shortest route you can take to the poor house.
And if that's not bad enough, if you haven't started to save, invest, for your retirement when you were in your twenties, you have made another very bad mistake. The amount of money you will need to just get by in our inflated markets is huge. A good estimate would be in the neighborhood of three quarters of a million dollars in today values. What will you need in thirty years? Triple that?
Think about that for a minute then make decisions for the future accordingly.
Debt Is Becoming a Growing Problem in Retirement
Source: Rodney Brooks, "Get Rid of that Debt Before You Retire," USA Today, April 22, 2015.
April 24, 2015
According to the Consumer Financial Protection Bureau, the percentage of homeowners 65 and older with mortgage debt increased from 22 percent in 2001 to 30 percent in 2011. Among those 75 and older, the rate more than doubled, from 8.4 percent to 21.2 percent.
In addition, the Employee Benefits Research Institute (EBRI) says U.S. families carrying the highest levels of debt were those with heads of household aged 55 to 64. They had an average debt level of $107,060 in 2010.
For an age group nearing retirement, that is not a good thing. Moreover, that may be why Baby Boomers' confidence in having sufficient savings to last through retirement dropped to a five-year low. An Insured Retirement Institute survey reports only 27 percent of Boomers are highly confident that their savings will last.
Thomas Anderson, author of The Value of Debt in Retirement, says there are actually three kinds of debt:
In addition, the Employee Benefits Research Institute (EBRI) says U.S. families carrying the highest levels of debt were those with heads of household aged 55 to 64. They had an average debt level of $107,060 in 2010.
For an age group nearing retirement, that is not a good thing. Moreover, that may be why Baby Boomers' confidence in having sufficient savings to last through retirement dropped to a five-year low. An Insured Retirement Institute survey reports only 27 percent of Boomers are highly confident that their savings will last.
Thomas Anderson, author of The Value of Debt in Retirement, says there are actually three kinds of debt:
- Oppressive debt — credit card debt or payday loans — has interest rates higher than 10 percent.
- Working debt includes mortgage debt, which usually has 3-5 percent interest rates.
- Enriching debt is debt people choose to take on but have the money to pay the balance.
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