In March of this year, statistics showed that the average revolving debt on credit cards was $16,048 for households in America. When adding those without revolving debt into the picture, the average drops to $5,700, and the median is even lower, at $2,300.
However, for people who have retired, this type of debt can be very problematic. People often assume that those who have decided to retire figured out all of their debt issues before doing so. While young people may find debt — like student loan debt — common, they assume they’ll put that all behind them by the time they stop working. This isn’t always the case.
There are two big issues here for retirees. One is that they could have far more debt than those numbers show. They could have over the average in credit card debt, or they could have additional debt like loans taken out for cars, boats and homes.
The second issue is that many of these people are on fixed incomes that are less than what they used to earn. They may have pension plans, retirement funds, Social Security payments or some combination of the above.
However, since they’re not working, there’s no way to increase their income. If the debt builds up to more than they can afford, they’re stuck. The only way to get out of debt by paying more each month is to cut back somewhere else.
If you’re facing a crisis because you’re on a fixed income, you can’t pay off what you owe and there seems to be no way out, be sure you know what options you have. There are tactics that may help, such as bankruptcy and debt consolidation.