Written by Natalie Schroeder, Andrea Bowling, and Esther Abass
Researched by Esther Abass and Natalie Schroder
I pull on my extra sweater as I look outside and watch the postman walking through the leaves covering the sidewalk.
I open the door before he gets up the steps.
“Hi, Mr. Sylva how are you doing today?” he asks handing me my mail.
“Pretty well, I think we might get snow next week,” I say hoping to draw out the conversation.
We talk for a minute and then he is back crunching leaves under his feet as he continues his route. I flip through the few pieces of mail and see the utility bill and my heart sinks a little. I put the other mail on the table and open the bill to see how much it will be. Before I can unfold the paper my mind starts going through things I can cut out this next month, I can skip some of my medicine and that will help, and maybe if I just have toast for breakfast.
My eyes scan down the bill to the total due and my heart skips a beat.
This can’t be right. I start looking at the detail and my usage is the same as last month, but then I look at the rate, it is down 3 cents per hour. What a relief my bill went down by $20.00, that should be enough to cover my medicine.
If you are having money problems, you are not alone. Over 25 million Americans ages 60 and over are facing financial insecurity. As people retire, their income declines and they begin to live primarily off their retirement savings and Social Security income. Rising housing and health care bills, diminished savings, and job loss in recent years have made older Americans especially vulnerable to financial struggle and falling into debt.
In the past five years, the share of households having debt, as well as the amount of debt, has increased among people ages 65 to 74 years old. For many elderly households that are in debt, the debt payments make up over 40% of their household income, which doesn’t leave much left to live on. Having debt during retirement can also eat up the assets you’ve accumulated during your life such as your earnings, savings, and the equity in your property, as well as affect the timing of your retirement and Social Security claiming.
Housing debt has been major financial problem for people ages 55 or older, with bankruptcies and foreclosures significantly increasing for this group in the past 20 years. Homeowners threatened with foreclosure should seek legal help immediately. You have the legal rights to try and save your home and an attorney can help you navigate the legal process. However, if you are not able to save your home and it is sold at foreclosure auction to cover your debt, in most states, you are entitled to any excess proceeds from the foreclosure sale. So, if you owed $100,000 against your property, and it sold for $180,000, then you are entitled to $80,000! Lenders do not like to give up this money easily, so this is another reason why getting legal help is important.
Possible sources of legal help are the neighborhood legal services office, a bar association panel of pro bono attorneys, or a program providing legal assistance for the elderly. But BE CAREFUL, there are many predatory law firms out there that will charge you large contingency fees in exchange for their services. Do your research on the legal help you seek out. For a list of free legal clinics in VA Facilities across the country, click here. For more steps on how to avoid foreclosure, click here.
High medical expenses are one reason many people over the age of 65 go into debt. Despite Medicare coverage, older adults still pay high out-of-pocket costs for certain medical services. Individuals with functional or cognitive impairment, for example, often require long-term services and supports that Medicare does not cover. Due to the lack of coverage, people who have higher out-of-pocket spending for medical care are more likely to report that medical care has increased their credit card debt. In addition, many senior citizens are targets of scam and fraud, especially when it comes to health care, medical bills, and prescriptions. Senior Medical Patrol (SMP) helps individuals detect billing errors and fraud when it comes to Medicare. Access this resource by clicking here.
Providing financial support to children and grandchildren has also increased the likelihood of having debt at older ages. Many states offer kinship care payments to blood relatives who care for children in the foster care system and includes grandparents who care for grandchildren. Click here to see a factsheet of information that will help you navigate the child welfare system and click here for a list of kinship care contacts and programs in your state. Click here to see all of your all of state’s available contacts, support groups, public benefits, educational assistance, and relevant laws for grandparents who care for grandchildren.
Predatory lending practices are another reason why the elderly might find themselves struggling financially. Regulations that once reduced access to loans for people whose financial standing put them at risk of defaulting have been removed, and some lenders have taken advantage of this by granting loans at high interest rates to people who can’t afford them. These predatory lenders are known to target the elderly because they have often amassed a lot of equity in their homes and because they usually live on fixed incomes. According to an article published in The Elder Law Journal, “incidents of debt-collection agencies subjecting elderly Americans to harassing and abusive practices have the potential to occur at an alarming rate.” Click here for tips on how to spot and avoid predatory lenders, as well as what to do if you find yourself a victim of predatory lending.
If you are over the age of 65 and facing financial hardship, check out these great resources!
The Nation Council on Aging (NCOA) has a free service called Benefits Checkup that will give you a report on the financial help available in your area. All you have to do is enter your zip code and answer 8 easy questions. This service has over 2,500 federal, private, and state benefit programs that help seniors, ranging from medication, transportation, housing, food, health care, and income assistance. To access this resource, click here.
There are many different programs that give financial advice and assistance to people over the age of 65. The website, needhelppayingbills.com, lists programs that are offered by the federal government, the state, the Area Agency on Aging offices, as well as charities or social service organizations. The exact type of senior citizens resources available near you will vary by state, county, and agency. Some of the programs that are offered for low-income senior citizens and the elderly include government benefit programs, Medicare and health insurance assistance, financial help, home care, food programs, and grants for paying for medications or other bills. To see resources available to you, click here.
There are many government income, health, and care programs for seniors, but finding the right one for you can be tricky. The H.E.L.P website offers a guide to eight different monthly income and healthcare programs to help ease some of the confusion. This website offers more information on programs such as Social Security Retirement, Social Security Disability, and Supplemental Security Income, as well as Nursing Home Medi-Cal, In-Home Supportive Services, and the Veterans Aid & Attendance Pension. To access this guide, click here.
To see a list of companies that offer different discounts to senior citizens for dining, retail, prescription medications, travel, and more, click here! For a list of discounts for Veterans, click here!
Verizon Wireless offers lower phone rate plans nationally for subscribers 55 years of age and older! To learn more, click here.
There are many city and state programs that offer lower utility rates to people with low-income, as well as seniors. The National Council on Aging has information on energy assistance programs for low-income seniors and adults with disabilities, such as the Low-Income Home Energy Assistance Program (LIHEAP) which provides grants to states that are used to help with energy costs. To learn more about this program, and others like it, click here. Many states also offer assistance to help low-income households avoid having their utilities shut off. To learn about the programs offered in your area, call the National Energy Assistance Referral Project at 1-866-674-6327 or TTY 1-866-367-6228. The California CARE program offers a 30-35% discount on electric bills and a 20% discount on natural gas bills for low-income households, to learn more click here. Utility discounts and programs vary by state, so make sure to speak to your utility providers about any discounts you may qualify for.
Tax Breaks For Seniors
There are also many tax breaks that are offered to people 65 and older, such as bigger standard deductions, a higher tax-filing threshold, property tax breaks, credit for the elderly and disabled, additional IRA deductions, 401(k) catch-up contributions, no early withdrawal penalties, and more! For a list different tax breaks for senior citizens, click here and here. These breaks can vary by state, so consulting with a tax professional is a good idea.
The Tax Counseling for the Elderly program provides free tax assistance to people ages 60 and older. Every year between January 1st and April 15th, IRS-certified volunteers are available assist with basic tax return preparation and electronic filing. To learn more, click here.
The AARP Foundation’s website offers a list of available benefits, by state, for people over the age of 50. To check out the different benefits available in your state, click here. In addition, elderly Veterans may be eligible for a wide range of benefits through the VA, including disability compensation, pension, education and training, health care, home loans, insurance, vocational rehabilitation and employment, and help with funeral expenses. Click here to learn more or contact your local Veterans Service Office (VSO) to find out what benefits you qualify for. Find a local VSO by clicking here! Also, check out the KnowAVet article on discovering your benefits through the VSO!
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