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Why are more people carrying debt into retirement?

Many of us grew up with parents or grandparents who didn't believe in credit cards or virtually any kind of debt, except perhaps a mortgage. That was often paid off before they retired.

Today, however, it's more common for people in their senior years to continue to have debt. The amount of debt carried by people 75 and older has been increasing in the last decade. According to a study by the Employee Benefit Research Institute (EBRI), almost half of retired people in that age group owe money. That's double the amount owed just over a quarter-century ago in 1992.

While they don't owe as much as younger people do (their median debt is just under $21,000), many of them are living on fixed incomes that come from sources like Social Security and pensions. The average annual Social Security payout is approximately $16,400.

Most seniors' debt involves their mortgages. However, they're increasingly turning to credit cards to pay for everyday expenses. For the group coming up behind them who are in their pre-retirement years (the 55 to 64 age range), student loan debt is becoming a more serious problem.

One reason for the increase in debt among seniors is the changing attitudes around it. It no longer carries the stigma that it once did.

However, it can become a problem when people reach an age where they have fewer options for increasing their income and often face higher medical bills. The head of EBRI says, "We've seen instances of seniors foregoing required medications…because they can't afford it."

Some seniors are going back to work, at least part time, to increase their income stream or putting off retirement for as long as possible. Others are moving to smaller residences or opting for reverse mortgages. If you're facing mounting, and seemingly insurmountable, debt, it's essential to learn about all of your options for getting out from under it.

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