How Debt Shapes Health Outcomes for Older Americans
While younger adults typically carry more debt — student loans, mortgages, car loans — today’s older generation is more indebted than ever before. In fact, 75% of retirees are carrying their debt through retirement.
Older adults are outspending their annual income by over $4,000. That means as interest rates increase, 43% of older households will be facing higher debt costs. Meanwhile, current and future Social Security beneficiaries are preparing for a 20% pay cut. And the Social Security Trustees project that the program's funds will run out of money altogether by 2035.
Not only are these statistics frightening for a retiree’s financial outlook, but they’re also posing a threat to their overall health and well-being. Is financial debt making you sick?
The debt domino effect
When you’re carrying significant debt, the physical and emotional toll can make it challenging to enjoy your post-working years to the fullest.
According to a recent New York Times article, indebted older adults fare poorer on a range of health measures — from depression to inability to work to impaired ability to complete daily tasks like bathing and dressing.
Research has uncovered a two-way relationship between debt and negative health outcomes. Older adults in debt are more likely to have had two or more doctor-diagnosed illnesses, including hypertension, cancer, diabetes, heart attacks and strokes.
And with more health issues come more medical bills.
Older Americans are paying massive health costs, despite Medicare coverage. In 2020, one-fifth of Medicare beneficiaries age 65 and over paid $2,000 or more out of pocket to cover costs beyond their premiums. These uncovered expenses are expected to consume 52% of the average Social Security check by 2030.
The healthy finances-healthy aging connection
Secured debt — like mortgages that are backed by an asset — is less detrimental to your health than credit card balances and medical bills, according to the New York Times. The reasoning? This type of debt is typically a well-planed and carefully considered investment decision.
By taking out a reverse mortgage, you can convert a portion of your home equity into a useable resource, freeing up money to reduce monthly bills, help cover medical costs, supplement your income and so much more.
†The funds may be accessed as a lump sum, monthly payments or a line of credit that’s available at your convenience, all while continuing to live in and own your home. As with any mortgage, you must meet your loan obligations, keeping current with property taxes and insurance, as well as basic home maintenance.
To learn more, contact the loan specialists at Reverse Mortgage Funding, LLC (RMF) at (888) 277-1567. And don’t forget to download our free 2022 Social Security Guide to help you more accurately plan your retirement financial future.
This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.5-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.
†Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages.