Many seniors worked a lifetime, saving and investing for the days when they no longer had to work. Retirement and the golden years. Sadly, many seniors are struggling too much to enjoy retirement as their nest eggs dwindle or are lost.
Economics & Health
An unhealthy economy and physical health issues are posing serious threats to many seniors' financial security.
The crushing weight of credit card debt is driving more and more seniors into bankruptcy. Medical bills and loss of income from poor investment performance are just two reasons why many seniors are relying on credit cards to help pay day-to-day expenses.
Aside from the costs of medical bills, health problems themselves cause financial worries. Conditions like Alzheimer's disease, the debilitating condition that robs a person of his memories and the ability to think clearly, may lead seniors to misplace money, make poor investments, or fall victim to scammers.
Joint bank accounts are popular with seniors. If something happens to one person named on the account, the other named person has immediate access to the money. It's a way to keep money from being tied up in probate if one person dies, too.
If the other person runs into financial problems, however, that money may disappear. An elderly mother lost about $28,000 - her entire life savings - when her son's business failed. The money was in a joint account she set up in case of an emergency. The son's creditors took the money to pay his business-related debts.
There are steps you can take to protect your or a loved one's nest egg from problems like these:
- Manage credit card use and balances. Try to use them only when absolutely necessary, and try to pay the entire balance each month to avoid high interest charges
- Know your rights under debt collection laws, like the Fair Debt Collection Practices Act. Don't be bullied into thinking bankruptcy is the only way out
- Consider bankruptcy as your last resort. Talk to your creditors about setting up a repayment plan
- Talk to a financial advisor about handling your retirement funds. You can maximize your returns and protect your money from scams at the same time
- Talk to your bank or an attorney about options other than a joint bank account, especially if the other person owns a business or has credit problems of his own. A power of attorney or a trust may be a better way to give someone else control of your money in an emergency
- If your spouse or loved one is diagnosed with a medical condition like Alzheimer's, limit her access to checking, savings, and retirement accounts and talk to an attorney as soon as possible about estate planning options
It's dreadful even to think about losing a lifetime of hard work to secure an enjoyable retirement. You can prevent it by taking action today.
Questions for Your Attorney
- A debt collector told my elderly father his social security benefits could be taken to pay his debt. Is that true?
- Can I have my name taken off my parent's bank account or does he have to request the change?
- Should my parents take out a reverse mortgage to pay off their credit card debts?