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OVERVIEW
Debt life stages
The debt treadmill can start during youth and keep going, sometimes straight into the not-so-golden years.
Out of the red and into the black

Life stages of debt

Seniors
Retirement is on shaky ground. No longer assured of pensions, today's retirees are easing into their golden years with less savings and more debt. If acceptance of debt and lack of savings are symptoms of the debt epidemic, this stage of life is where the ravages of the disease really flare up.

Debt life-stages
College
Young singles
Young families
Mature families
Empty nesters
Seniors

Throughout their lives, people are spending what they used to save, says Manning. "And so the real crisis is being deferred to retirement."

"We're seeing retirees leaving the workforce now with as much as $60,000 in unsecured debt," says David Jones, president of the Association of Independent Consumer Credit Counseling Agencies.

The cycle of debt has a domino effect. As today's young people take on more debt for education, they will spend the money they should have been saving for their retirements to pay off that debt.

Today's retirees are also impacted by skyrocketing education costs.

We're seeing retirees leaving the work force now with as much as $60,000 in unsecured debt.

"A bigger percentage of retirees today still owe on their mortgages and that's not isolated from what's happening to young people around college. A lot of people are taking out second or third mortgages to help pay for college," says Draut.

"That's moved mortgage payments to the retirement years which used to be much more uncommon than it is today," says Draut.

For seniors in good health, that leaves only one option -- work. Those that find themselves in debt and in poor health will struggle.

"There are going to be very bad endings for a lot of people," says Mandell.

He points out several forces conspiring against seniors, including expected cuts in Social Security and diminished pensions. "The one thing that may save them is that, with the shrinking labor force, if they are valuable to their employer, they might get the opportunity to work until they're 92," he says.

"This may not be what people had originally hoped for."

-- Posted: Feb. 25, 2008
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