Linfield says that among older adults, a variety of factors are responsible for their financial plight. Dwindling nest eggs and rising medical and living expenses are only part of their story. Many older parents are supporting their middle-age children. Some are struggling with inadequate “gap” coverage for their health insurance. And for some it’s poor financial planning.

“We’re also living longer,” says Linfield. “Years ago we didn’t live to 90, and now we do. There are economic consequences to that.”

Older adults are also among the many Americans continuing to struggle with unaffordable mortgages. In the third quarter of this year, foreclosure filings were reported on 937,840 properties, a 5 percent increase from the previous quarter and a 23 percent hike over the same quarter last year, according to a report by RealtyTrac, an industry group that tracks foreclosure activity.

RealtyTrac doesn’t break down foreclosures by age group, but last year AARP released an analysis on people facing delinquencies and foreclosures in the last six months of 2007. The findings: More than one-quarter—nearly 700,000 people—were age 50 or older.

A need for financial advice

Older adults also account for more than a quarter of the 51,000 people who sought financial advice in 2008 from ClearPoint Credit Counseling Solutions, a national nonprofit counseling group based in Richmond, Va., says spokesman Bruce McClary.

This year is shaping up to be worse. Between January and September, some 16,400 people age 50 and older sought counseling advice.

“Unemployment and income reduction are what’s driving the numbers; that’s why people are coming to us,” says McClary, whose organization provides counseling in credit, foreclosure, budgeting and bankruptcy issues. “These are people who were able to make ends meet with steady employment.”

“We’ve seen lots of people who were relying on their investments to retire in the last year or two, but with underperforming investments and huge losses, they found out they had to work longer,” says McClary. “They were relying on that income to tide them over until their investments did better, but then the unemployment situation caused people to lose their jobs at a time when they needed to work the most.”

Handling huge credit debt

McClary offered these tips for people with excessive credit debt:

• Stop using credit and make purchases with cash;

• Make at least your minimum payment each month;

• Make a budget, trim expenses and put the money you save toward your credit card debt each month;

• Pay off cards with higher interest rates first. If you can, pay off smaller balances as well, which will free up money to put toward larger balances.

Carole Fleck is a senior editor at the AARP Bulletin.

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