Baby Boomers are Carrying Lethbridge Debt into Retirement ...

As the Baby Boom generation moves into their mid-sixties, they bring with them a host of financial challenges not faced by previous generations. Mortgage and Lethbridge consumer debt carried into retirement places serious burdens upon seniors entering their golden years. Many are unprepared for the significant drop or loss of income that accompanies retirement.

When the Housing Bubble Burst

Before the Baby Boomers began to plan for their Canada retirement, a mortgage-free home was the foundation of a sound financial plan. Paying off the mortgage was the goal of most home owners. Homes rose steadily in value, making the homestead not only a safe haven, but also a good investment.

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Baby Boomers came of age in a time of relative peace and remarkable prosperity. Houses appreciated quickly, making it easy to harvest the profits through refinancing. Continued rapid appreciation made it painless to tap into this previously untouched source of family funding.

Then the housing bubble burst. Workers approaching retirement saw the value of their homes plummet. Many were saddled with a second mortgage which they had fully assumed would be paid off not by job income, but by home appreciation. Others, whose plan involved selling their home and using the profit to finance their retirement, saw their hopes evaporate as their home?s value dropped.

Easy to Get and Easy to Max Credit Cards

Just about anyone over the age of 35 remembers the late 1990s as a time when multiple credit cards offers came in the mail every day. Requirements were loose and limits relatively high. Generations Y and Z were not the only ones biting hard at this easy credit hook. Men and women approaching retirement age found credit cards a valuable tool in their late-stage acquisition years. They bought everything they wanted and many easily paid off credit card balances with disposable income or second mortgages. The liberal use of credit cards became a way of life, often touted by financial gurus as part of a healthy financial plan. Then came the recession of 2007?workers in their mid to late 50s were hard hit.

Baby Boomers Face the Credit Crunch Music

Job losses, rapidly decreasing home values, and high Lethbridge consumer debt balances combined to create a perfect storm for Boomers. Some suffered from all three catastrophes, most were hit by at least one. With retirement age looming less than 10 years away, some men and women in their mid and late 50s were faced with preparing for retirement from scratch. Others found themselves over their heads in debt. A study conducted by the University of Michigan Law School concluded that those over the age of 65 are filing for bankruptcy faster than any other age group. The oldest demographic studied, retirees aged 75 to 84, saw bankruptcy rates rise over 400%.

Baby Boomers are facing retirement age with many challenges. Carrying Lethbridge debt into retirement taxes finite resources meant to finance the balance of one?s life. New strategies are needed by our oldest citizens.

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Source: http://www.personalbankruptcylethbridge.ca/baby-boomers-are-carrying-lethbridge-debt-into-retirement/

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