A recent article at USA Today refers to seniors racking up credit card debt during their twilight years and not worrying about whether they can pay it off in their lifetimes as a dirty little retirement secret. According to a study by Cesi Debt Solutions only 4% of retirees delayed their retirement due to debt. An amazing 30% had no savings when they retired. Most retirees did have some form of debt when they retired.
The study showed 35% of retirees had credit card debt upon retirement and slightly under 30% had incurred credit card debt since retiring. Almost 40% of those surveyed that had incurred credit card debt since retiring indicated that they had no plan for paying off the debt and were not worried about paying back the debt during their lifetime. If they do not pay off the debt during their lifetime the debt will come out of their estate. If the estate isn’t large enough to cover all of the debt then the creditors are out of luck. Children do not inherit their parents’ debts.
What do you think? Is it wrong for seniors to rack up debt that they know they won’t pay off or is it just a wise use of credit?
Comments
2 responses to “The Dirty Little Retirement Secret”
Some seniors I think just feel cornered with their debt and their finances especially those who have not been able to really build up their savings accounts from the years of working.
This is the same kind of thinking (non-thinking?) that had these people retiring without any savings. I think it’s called Magical Thinking. The kind of entitlement mentality that figures that someone, somewhere, somehow will still take care of them.
Everyone who has a credit card has credit debt at some point – even if they pay it off monthly. I wonder what percent actually accrue debt without the intention of paying it off. Or is this a “welfare mothers” slant, wherein only a very few people are actually committing the stated idiocy.
Yes, it’s a terrible and selfish line of thinking. Stupid is as stupid does.