Debt for Seniors Can Be a Problem

Older adults who find themselves getting behind financially may need credit counseling and a debt repayment plan.

Debt for Seniors Can Be a Problem

Older adults who find themselves getting behind financially may need credit counseling and a debt repayment plan.

More seniors than ever before are carrying debt into their retirement years. According to the Survey of Consumer Finances, senior households with debt increased from around 50 percent in 1989 to just over 61 percent in 2013. We live in a world with easy credit, where most of us have some kind of debt—whether from home or car loans or credit cards. However, debt is more worrisome for older adults, especially those living on fixed incomes, because we are also dealing with increased medical costs.

In fact, medical debt is the most common debt among seniors (National Council on Aging (NCOA)). More than 84 percent of people aged 65 and up are coping with at least one chronic condition, and often more as they age. A study in the Journal of General Internal Medicine revealed that out-of-pocket medical expenditures in the five years prior to an individual’s death totaled more than $38,000, leaving 1 in 4 seniors approaching bankruptcy.

Another common source of debt among senior households is credit cards. In 2001, approximately 27 percent of such households held credit card balances. By 2013, more than 32 percent did, with 1 in 4 households carrying a balance of at least $7,200. In one survey, professionals who deal with seniors reported that unmanageable, overdue utility charges also contributed to financial problems.

The issue with debt is that an increasing amount of income must go toward paying off the interest. That means many seniors are shortchanging themselves on necessities such as medications, food or home repairs that can cause problems down the road.

Some financial advisers recommend paying off all debt before heading into retirement, although others say it’s a trade-off between using that money for investments and paying down debt. Most experts don’t see mortgages as a problem (unless you’re paying a higher interest rate than is available), because homes can be an investment.

Credit Counseling

Questions to Ask a Credit Counselor

Ask the right questions to make sure the credit agency is reputable and offers what you need:

• What services do you offer? The organization should offer a range of services, including budget counseling, and savings and debt management classes. Avoid organizations that push a debt management plan as your only option.
• Do you have educational materials available for free? Avoid organizations that charge for information.
• What are your fees? Are there set-up and/or monthly fees? Get a specific price quote in writing.
• What if I can’t afford to pay your fees or make contributions? If an organization won’t help you because you can’t afford to pay, look elsewhere.
• Will I have a formal written agreement or contract with you? Don’t sign anything without reading it first. Make sure all verbal promises are in writing.
• Are you licensed to offer your services in my state?
• What are your counselors’ qualifications? Are they accredited or certified by an outside organization?
• Are your employees paid more if I sign up for certain services, if I pay a fee or if I make a contribution to your organization? If the answer is yes, consider it a red flag and go elsewhere.

Source:
Federal Trade Commission

If you are struggling with debt, a good first step is to consult with a credit counselor, especially if you pay more than 20 percent of your income to cover debt payments. Credit counseling costs vary, but some nonprofits offer the service for free or at discounted rates.

A good credit counselor can help you organize your finances and develop a budget, and offer free educational materials and workshops. Your credit counseling agency may recommend that you enroll in a debt management plan (DMP). In a DMP, you make monthly deposits with the credit counseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills, according to a payment schedule. In return, your creditors may agree to lower your interest rates or waive certain fees. This is a long-term commitment as it could take 48 months or more to complete your DMP.

Many counseling agencies are nonprofit, but be aware that “nonprofit” status doesn’t guarantee that services are free, affordable or even legitimate. A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm doesn’t do that, consider it a red flag and go elsewhere for help.

To find a reputable credit counseling agency, do your homework first. TheNational Foundation for Credit Counseling(NFCC), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. You can get a list of approved credit counseling agencies from the U.S. Department of Justice. The National Association of Area Agencies on Aging can also connect seniors to local assistance.

Once you’ve got a list of counseling agencies you might do business with, check out each one with your state Attorney General, local consumer protection agency or the Better Business Bureau, which lists agencies that are accredited. The United States Trustee Program also lists credit counseling agencies approved to provide pre-bankruptcy counseling. After you’ve done your background investigation, interview the final candidates. See the sidebar, “Questions to Ask a Credit Counselor.”

Making a Budget

You can create your own budget using NCOA’s calculator. Creating a budget of your income and expenses can help you determine how much more you’ll need each month to pay down your debts, plus see where you can cut back your spending. List your income sources, such as retirement funds, pensions and Social Security, and your current debts, the monthly payment and interest rate. Then look at your monthly expenditures, including food, utilities and occasional expenses such as home and car repairs.

You may have to cut back on spending, such as decreasing travel, so you can pay more toward your debt. Or, you may have to increase your income by taking in a roommate or selling a car, RV or vacation property. If the situation is drastic, you may have to move to a smaller house or apartment.

Repayment Plan

The most logical approach to paying off debt is to first pay off the debts with the highest interest rates, while making minimum payments on the rest. However, there’s a satisfaction in getting rid of a smaller debt, even one with lower interest rates, which can spur you to eliminate other debts. NCOA provides a debt calculator to help you figure out how long it will take to pay off debts.

If you are paying high rates on auto, student or credit card loans, consider consolidating your debt in a lower-interest home equity loan or by refinancing your mortgage. Your new interest rate should be lower and tax-deductible. But take this step carefully, because if you can’t make the payments, you could ruin your credit and lose your house. NCOA reported that last year’s average interest rate on a mortgage was 3.5 percent and on a credit card a whopping 14.5 percent, so consolidation can make financial sense.

Another possible source to pay off debt is your retirement funds, but that money is usually taxable. Plus, experts warn against depleting your retirement savings or 401(k). You could also take out a lower-interest rate personal loan to pay off your higher-interest rate debts.

You also could contact your creditors and ask for more time to make payments. If you think you are paying too much interest, request your credit score and find out the typical interest rates for people with similar scores. If you have a hardship, ask your lender or a legitimate credit counselor about forbearance, a plan that freezes your account and sets up automatic monthly payments.

Lastly, always watch out for debt-collection scams that prey on people in financial trouble.

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How to Relieve Your Aching Back

Treatments include medications and exercise, but, surprisingly, a positive attitude can also help.

As we age, we can experience more back pain for several reasons, including wear and tear on our body over time. As your main structural support, the spinal column has to be strong enough to support you but flexible enough for a range of movement. Between each of the 24 vertebra in our spine, small joints allow your spine to move, and disks with jelly-like centers act as shock absorbers that prevent bones from rubbing against each other (fromEveryday Health)

As we age, the disks between the vertebrae wear away and shrink, which causes pain and stiffness as the bones start to rub against each other. In addition, the space around our spinal cord narrows over time. Known as spinal stenosis, this condition also puts pressure on the cord and spinal nerves, causing pain. Stenosis and osteoarthritis are two of the most common causes of lower back pain in older adults.

Facet joint osteoarthritis, also called degenerative arthritis or osteoarthritis of the spine, is a degenerative condition that develops gradually over time. The breakdown of cartilage between the spine’s facet joints can cause intermittent pain at first but can later develop into steadier lower-back pain, and may eventually cause sciatica pain into your legs (Spine-health)

How to Alleviate Back Pain

Short-term treatment for back pain, particularly in the lower back, includes medication, limited rest and heat, and ice packs. Surprisingly, in the long term, two other practices can ease pain: a positive attitude and exercise. Before you do anything, though, consult with your healthcare practitioner and figure out your options. See sidebar, “Ask Questions Before Getting Treatment.”

Pain medications are available either over-the-counter or by prescription. Some medications reduce inflammation, which often causes pain, while others stop the pain signals from reaching the brain. Each medication has risks, possible side effects and drug (or food or supplement) interactions, which a physician needs to evaluate.

Older adults have a higher-than-average risk of side effects from medication, including analgesics such as nonsteroidal anti-inflammatory drugs (NSAIDs). Also, because many seniors take numerous medications, there is greater risk that pain medication can interact with other drugs.

Exercise the Pain Away

While it might seem counter-intuitive, because moving can be painful, exercise can help ease back pain. Medical experts recommend that you start moving as soon as possible, as long as it’s in moderation. Studies have shown that those with short-term lower-back pain who rest too long and avoid exercise, even walking, feel more pain and have a harder time with daily tasks than those who stay active. Exercise rehabilitates the spine and helps alleviate back pain. When done slowly and progressively, back exercises distribute nutrients into the back’s disc space and soft tissues to keep the discs, muscles, ligaments and joints healthy.

Before you start exercising, develop a regimen with the help of a professional, such as a physical therapist or chiropractor. Include aerobic conditioning, stretching and strengthening. Focus on your core, as stronger abdominal muscles can reduce lower-back strain. Exercise can also improve your posture, another common reason for back pain.

Stretching helps with flexibility and relieves the tension and tightness that can cause discomfort. Because your back pain likely took months, if not years, to develop, it can take weeks or months of exercising to find relief.

Emotional Connection

Researchers from the University of Sydney found that people who had symptoms of depression had 60 percent greater incidence of back pain compared with those who were not depressed (AARP). Although the link between back pain and depression isn’t clear, one theory is that people who are depressed are less likely to exercise and more likely to have disturbed sleep, both of which contribute to back pain.

Whatever the reason, pessimistic people feel more pain than optimists (Harvard Health Blog). On top of that, it’s easy to get depressed when you lose physical mobility, especially if exercise is an important part of your life. In a continuous loop, psychological distress can worsen the pain, which makes you feel more depressed and more intensely in pain. Eventually, the pain becomes all-consuming.

In fact, prolonged pain can rewire your brain, according to the Harvard Health Blog. When pain first occurs, it connects with your pain-sensitivity brain circuits. However, long-lasting pain can switch brain activity from the “pain” circuits to those that process emotions, making emotional control that much more difficult.

To break this cycle, psychological therapies can help lessen your emotional distress and therefore your back pain. The treatment with the greatest supporting evidence (for all chronic pain syndromes, not just back pain) is mindfulness, according to the Harvard Health Blog. A recent study demonstrated that a technique called mindfulness-based stress reduction can help reduce back pain and also improve emotional control by increasing blood flow to the brain’s frontal lobe.

Other mental techniques include cognitive behavioral therapy (CBT), a type of psychotherapy in which you challenge negative thought patterns to alter unwanted behaviors. CBT also treats mood disorders such as depression. Another technique, progressive muscle relaxation, increases the awareness of tension in your body.

Alternative Medicine

Ask Questions Before Getting Treated

Before you decide on a course of treatment, keep this advice in mind.

• Identify the type of back disorder you suffer from.
• Whether you’re experiencing back pain for the first time or you’ve suffered a relapse, seek the advice of an experienced, certified and well-recommended health specialist.
• Be an active participant in your care. Learn as much as you can about the risks and benefits of the treatments you are considering. Be clear on your treatment goals.
• Don’t be afraid to question advice. If a health professional recommends an invasive, experimental or expensive treatment, consider seeking a second opinion from a physician who frequently deals with your specific condition.

Source:
“Create a Plan to Relieve Your Back Pain,” Harvard Health Publications

Numerous alternative treatments may ease back-pain symptoms.

• Chiropractic care. A chiropractor hand-manipulates joints using a controlled, sudden force to improve range and quality of motion, which can ease pain.
• Acupuncture. This ancient Chinese practice uses needles to improve the body’s energy flow. One recent review of 22 acupuncture studies showed that it provided short-term relief from chronic back pain (WebMD).
• Massage. If tense or overworked muscles cause your back pain, massage might help.
• Yoga and Pilates. Yoga can stretch and strengthen muscles and improve posture, although you might need to modify some poses if they aggravate your symptoms. Pilates is another form of exercise that can help strengthen core muscles. Both Pilates and yoga can reduce stress, which can lessen pain.
• Electrical stimulation. A non-invasive technique, electrical stimulation can ease short-term back pain. The most common form is transcutaneous electrical nerve stimulation therapy, which works by flooding a pathway with low-level stimulation that keeps pain signals from reaching the brain.

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Everyone is at risk, but everyone can help- Alzheimer’s

Alzheimer’s is the only disease among the top 10 causes of death in America that cannot be prevented, cured or even slowed. But through initiatives like our2016 Annual Fund, the Alzheimer’s Association is working tirelessly to change that. Will you help fight Alzheimer’s by making a donation today?
Your gift will help us continue providing care and support to the more than 5 million people in the United States living with Alzheimer’s disease and their 15 million caregivers while advancing vital research toward methods of treatment, prevention and, ultimately, a cure.
Alzheimer’s is a cruel and fatal disease. But with your support of our 2016 Annual Fund, we can get closer to eliminating it.

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Limited-time Matching Gift Challenge – Alzheimer’s disease in the United States

Your gift today can be worth twice as much.

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Your gift can go twice as far.
$35 ? $70
$60 ? $120
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Greg and Roberta Kahlert

Dear Zoltan,
More than 5 million people are living with Alzheimer’s disease in the United States, and someone develops the disease every 66 seconds. That’s why we need your help now, more than ever.
Today, you can provide twice as much help and hope to those affected by Alzheimer’s with adonation to our matching gift challenge. The Kahlert Family Foundation has agreed to give $210,000 to the Alzheimer’s Association if we can raise that same amount. Greg and Roberta Kahlert are committed to the Association’s work to advance research while providing care and support to those living with the disease today.
The cause is personal to Greg, who wonders if the memory loss he noticed in his late grandmother may have been Alzheimer’s or another dementia. As the Kahlerts explain, “We realize the magnitude of the disease and how it impacts so many families through long-term health consequences and ongoing costs. We feel very strongly about supporting the Alzheimer’s Association because we want to fund both research and care and support programs.”
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Teaming up against Alzhiemer’s

Strong, loving and understanding, my mom was the most important influence in my life. Ten years ago my world was turned upside down when she was diagnosed with younger-onset Alzheimer’s at the age of 52.
My wife Whitney and I participate in the Alzheimer’s Association Walk to End Alzheimer’s^® to honor my mom and to raise awareness and funds to fight this terrible disease. Please join us and register today. Every dollar we raise helps to advance the care, support and research efforts of the Alzheimer’s Association^®.
Sincerely,
Chris R.
Walk to End Alzheimer’s
Team Captain & Grand Champions Club Member

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