Many Boomers Surprised By Debt In Retirement

Cynthia Lopinto Feature Article Leave a comment 1,840 Views

(NAPS)—If you’re like most people, retirement means more time to travel, play with grandkids and experience greater personal satisfaction in everyday life. But as Baby Boomers begin to retire, many will experience a different reality—one marked by debt. Fortunately, there are ways to avoid being among them.

The Problem

According to a new study commissioned by Bankers Life Center for a Secure Retirement, more than half of pre-retirees think they’ll pay off their debts before retirement, but only a quarter of retirees actually are debt free.

The same study found that eight in 10 middle-income Boomers currently have some debt, and nearly 25 percent have more than 20 years remaining on their mortgage.

“We tend to prepare for costs that we can anticipate,” said Scott Goldberg, president of Bankers Life. “Most do not foresee the amount of debt they will carry into retirement and other unexpected expenses, such as long-term care and various health related costs. Our studies show that only about half of Boomers feel they have a strong understanding of financial matters to overcome these hurdles.”

Golden Years Reality

Not long ago, many retirees relied on pensions and Social Security for income during their golden years. These income streams used to be enough to live on comfortably. Today, fewer companies are offering pensions and benefits from Social Security are getting leaner just as a greater number of Americans are retiring.

But as Boomers leave the workforce at what looks like lightning speed, they may not be prepared to continue paying off debt or other unexpected expenses.

According to the study, middle-income Boomers are unsure of the best ways to maximize their income and find additional sources of income during retirement. Nearly 90 percent express some concerns about making their money last in retirement.

“More than ever, it is crucial that Boomers take proactive steps in advance of retirement and recognize the options available while planning for a secure future,” said Goldberg. “From annuities to long-term care insurance to investments, the options beyond Social Security and pensions are increasingly tangible for middle-income Boomers.”

The Good News

Thanks to advances in medicine, retirees are living longer, more independent lives. Therefore, being financially prepared for long-term retirement is more important than ever.

More good news: It’s never too late for Boomers to meet with a trusted financial advisor to prepare and take the correct precautions that can set them up for a more fulfilling experience in their golden years.

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Cynthia Lopinto

Cyn LoPinto, M.A. is a gerontologist focusing on significant issues affecting older adults and their families. Her areas of interest include lifestyle enrichment, family dynamics, and caregiver support. Cyn has worked in both the recreational and healthcare industries.