With rising food, gas, housing, and healthcare costs, many people are struggling to avoid falling into debt. New research shows that older adults who accumulate debt are also more likely to report poorer health, depression, an inability to work, or cannot perform acts of daily living like bathing and dressing independently.
According to a recent New York Time Health report, debt among older adults is on the rise, and seniors who owe money are at greater risk of being diagnosed with multiple illnesses. High indebtedness in older age is an ongoing source of stress, and without full medical coverage, can lead to a worsening of health conditions. A new study using data collected over nearly 20 years found that older adults in debt were more likely to have two or more diagnosed illnesses such as diabetes, hypertension, cancer, lung disease, or cardiovascular disease.
In previous generations, seniors were less likely than younger adults to carry debt. But with rising costs, and more older adults financially helping their adult children or grandchildren, the golden years aren’t so gilded for all seniors. Credit cards, overdue medical bills, and student loan debt that carry high-interest rates become difficult for older adults to pay down. As unsecured debt rises, researchers found that health problems also increase.
Secured debt, which has an asset such as a house, is backed by the dwelling itself and is a planned expenditure. Usually, older adults plan to pay off their mortgage by the time they retire. Unsecured debt is often unplanned and comes as a surprise, in a time of crisis like a medical emergency or a sudden job loss. When these situations occur, older adults may find themselves living on credit cards, amassing debt, or taking payday loans with high interest rates.
More access to financial literacy programs and better regulation of lending practices that prey on low-income borrowers can help reduce the amount of high unsecured debt among older adults. Learning to manage stress, getting regular exercise, and eating a healthy diet is also important to help lower the risk for health complications. Learn more about paying down debt in retirement by following this link to a recent Forbes Advisor post.