Reduced income was the top hardship seniors faced in 2010 according to a study of 57,000 financial assessments made by those 55 and older with GreenPath Debt Solutions.
Almost four in 10 said reduced income was their main hardship, followed by 29% who listed having no financial plan. Next were medical issues, cited by just 12% of those who contacted GreenPath. Fourth was unemployment, at 9%.
"Reduced income is a reality for seniors in our economy," said Dorothy Barrick, GreenPath group manager and counselor. "Many people had a lot of their retirement investments wiped out during the recent economic downturn and are realizing now that their income has been greatly affected.
"Many people are finding it necessary to find some part-time work to help out with their day-to-day expenses, as their investments start to build back up again. In addition, those that were able to retire recently have been faced with lower returns on their investments and social security."
She said those who lacked a financial plan were spending more money during the recession to support their life style.
"While they might not be spending extravagantly, that uptick in credit card use to bridge their financial gap could add up quickly, putting them in a financial situation that they may have not experienced before," Barrick remarked.
When a senior has a budget that does not balance, he or she is has fewer options than a younger adult, she continued. But these seniors do have places to turn for help. She suggested that seniors reach out early to a nonprofit organization before problems occur, to review expenses and help them build a budget for today and tomorrow.
"People really need to get an understanding of where their money goes each month," she said. "They need to pay attention to monthly credit card use and balances and devise a plan to pay off that credit before the interest rates build up, causing an even further strain on their finances."
GreenPath offers free financial counseling to seniors in the areas of debt, debt management, budgeting, housing issues (including reverse mortgages for seniors), bankruptcy and more.
