14 Financial Resources for Seniors in Debt
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Do your clients include a senior retiree with looming debt and considering filing for bankruptcy? Here is a list of 14 financial resources that can help get their finances in order.
Retirement, a time previously ripe to lay back and enjoy the quiet of the night, is now crowned with stress, anxiety, depression, and rage.
And debt is the reason why
Seniors in America are now carrying more debt than ever before. In 2016, the financial burden averaged $31,050, according to a 2019 Congressional Research Service report, and the figure was a significant jump from an average of $7,500 in 1989.
The numbers underscore the direness of the situation, which plagues the golden years of almost half of households headed by someone over 55, according to the U.S. Government Accountability Office.
The rise in senior indebtedness has also led to an exponential growth in the number of older Americans filing for bankruptcy.
In 1991, elders made up 2% of the bankruptcy relief claims; in 2019, the share increased to 12%, according to an Indiana Legal Studies research paper.
In most cases, elderlies who go bankrupt come from the lower end of the income ladder.
A senior with a looming debt over their head might be thinking, "is bankruptcy the only option left for me to get out of debt?" Of course not.
While the bankruptcy code may help you out of your debt, the choice has significant consequences like property loss.
Only file for bankruptcy when you have exhausted all your options.
Behold, there are several financial resources for someone to tap into to get their economic life in order and pay off debt.
Social Security can be a source of income for you if you cannot work due to a disability or when you retire.
If you pass on, it may continue to benefit your spouse, children, or parents, who are your legal dependents.
Organizations that can lend you a hand
Several organizations can assist you in your retirement years. These include -
- Volunteers of America - The organization provides various services, including nursing care, affordable housing, transportation, Medicare enrollment assistance, and meal programs.
- Feeding America - Working with a vast network of food banks, the organization provides meals for seniors.
- Retirement Jobs - The organization assists seniors in navigating age discrimination in the workforce and finding employers who fit their skill set and employment requirements well.
- Dental Lifeline Network - By collaborating with volunteer dentists and dental labs throughout the United States, the organization makes dental care accessible.
- Meals on Wheels America - The organization offers seniors (60 and older) nutritious home-cooked meals delivered to their homes or arranged nationwide.
Seniors direct most of their expenses towards two areas – housing and healthcare.
Among the number of government programs available to seniors nationwide, I will focus on the ones that can help cut housing and healthcare costs.
These programs include:
- The U.S Department of Energy's Weatherization Assistance Program - The program helps low-income households save money on energy costs by making their homes more energy efficient.
The program provides weatherization services to approximately 35,000 homes annually. By using this program, you can expect to save an average of $372 or more per year.
- The Low Income Home Energy Assistance Program (LIHEAP) - Helps manage costs related to home energy bills, energy emergencies, weatherization, and energy-related (minor) home repairs.
To find out if you are eligible to receive LIHEAP benefits, contact your state or tribal LIHEAP office.
For help applying for LIHEAP benefits, you may also call this toll-free number: 1-866-674-6327
- Housing Choice Vouchers Program - The program provides subsidies to low-income families and the elderly to help pay rent.
- The Section 504 Home Repair Program - offers senior homeowners a grant to repair damages deemed hazardous to safety and health.
To apply for a Section 504 Home Repair Loan or Grant, contact your local Rural Development office.
The USDA provides a service center locator here. However, before applying, talk to your lender and ensure they honor this program.
Senior citizens spend about 16% or more of their budget on healthcare – more than any other age group.
If you are a senior retiree, addressing your healthcare costs is one of the most effective ways to get your finances in order.
Here are a few programs that provide financial assistance:
- Medicare - It is a federal health insurance program for people over 65 working ten years or more at a full-time job.
- Medicaid - About 20% of Medicare subscribers also have Medicaid coverage. Medicaid is a health insurance program for older adults with low income.
- iCanConnect - The program helps Americans with significant hearing and/or vision loss access to technological assistance.
If you are facing a financial crunch due to debt and lack of income, you must focus on making money. But don't worry; you don't need to jump back into the full-time workforce. Even a part-time job with minimum wage can go a long way.
If you are looking to re-enter the workforce, the Senior Community Service Program (SCSEP) offers training positions in community service on a part-time basis.
Participants in the program work an average of 20 hours per week, are compensated with at least the federal minimum wage and are involved in various volunteer endeavors.
To get started, visit here and find your local SCSEP office.
You have more options than you think
Struggling with a looming debt is never easy, especially when you are a retiree. But you have an array of financial resources available.
Besides the above list of resources, you can also work with credit counseling agencies that provide services like debt management.
In short, if your finances are down and you're considering filing for bankruptcy, remember that it is a last resort. You have more options than you think.
Lyle Solomon has extensive legal experience as well as in-depth knowledge and experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, in 1998, and currently works for the Oak View Law Group in California as a Principal Attorney.