Finance

Economic Collapse: Seniors Sinking & Swimming in Debt

Economic Collapse: Sinking & Swimming

Over a decade ago I was a millionaire – on paper at least. Like many seniors, I’m facing economic collapse. Today, I have to keep an eye on every dollar to get by from month to month. It has been an exercise in sinking and swimming. An ode to our time. A symphony of economic scales that occurs at least once in all lifetimes based on the history of our country.

Real Estate Economic Collapse

I am one of those seniors who got caught in the real estate economic collapse. I watched a whole lot of equity in a home and a couple of businesses evaporate. It all just blew away in a fistful of hurricanes helpless to do anything about it.

It was a big adventure; a life lived to the fullest in one of the most beautiful places in the world – the Florida Keys for a quarter of a century. I left with about what I started with and no regrets.

Reverse Mortgages: What Are They, Who Benefits?

I’m just another statistic making up some of the bad news about The Great Recession. I’m one of the seniors who has felt or is beginning to feel the hammer falling on their real estate values and dreams of a grand retirement lifestyle. Now in 2021, things don’t seem much better unless you’re a billionaire.

According to an AARP report, the foreclosure rate for people age 75 or older increased from 0.33 percent in 2007 to 3.19 percent in 2011. The percent of people aged 75 or older who are 90 days or more late on mortgage payments was 0.68 percent in 2007. That grew to 2.68 percent in 2011. More than 1.5 million homeowners nationwide age 50 or older lost their homes to foreclosure from 2007 through 2011

Foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012. More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction, or repossession, up 1.5 percent from the last six months of 2011. Among the 20 largest markets, Tampa, Fla.; Philadelphia; Chicago and New York City had the biggest percentage increases in filings, according to RealtyTrac Inc. of Irvine, Calif.

Senior Unemployment Spikes While Net Worth Shrinks

Flash forward to the COVID pandemic and we have a new sort of economic collapse. Unemployment among seniors is even worse than the Great Recession (50% higher to be exact) according to the Schwartz Center for Economic Policy Analysis at The New School. Seniors are actively being discriminated against due to the risk of higher health care costs.

Years of Peak Unemployment

To make matters worse, a recent study made by the National Council on Aging has shown how economic collapse negatively affects net worth for seniors.

Rebuilding Wealth After Economic Collapse

There are a lot of seniors out there who are facing what I went through a half-dozen years ago. It’s an exercise in sinking but learning to swim away safely.

In my 25 years in the Florida Keys, I built one house, rebuilt another, and did a combination building and rebuilding job on a third. I started one business from scratch and later sold it. Internal Revenue got a large chunk of what little I made on the project over nine years. Today that business still provides around 100 jobs in the Keys that didn’t exist before I got there.

World stands to witness greatest rise in inequality since record-keeping began

I made a respectable living from the businesses I either started or ended up running in the Keys. Circumstances beyond my control ended up wiping me out. Eight hurricanes in two years, the arrival of big-box stores that fatally crippled our mom-and-pop operations, and the economic collapse of the real estate market.

The year before I finally bailed out the taxes and insurance on my home had climbed to nearly $28,000 a year, way beyond what I could afford. I was not in a position to move before the market collapsed because I was taking care of a 91-year-old mother-in-law who was under hospice care.

Avoiding Bankruptcy

My timing could not have been worse. In the middle of it, all my mortgage companies went bankrupt. Before I knew it, there were three financial institutions that claimed they held the mortgage on my home. Yet, none of them could produce the original mortgage papers.

Trying to sell a home that required a $2,500 a month escrow for just taxes and insurance is almost an impossible proposition, particularly when the paperwork is all messed up. Fortunately, with the help of a realtor who wanted to learn the short sale business, we finally pulled it off. My wife and I left town with what we needed to start retirement in a less expensive location in mid-state Florida.

We virtually swam away with a couple of life-saving buoys called Social Security and a small private annuity I had laid away during my working years. Today that’s what we live on and we are comfortable. No longer millionaires on paper, but not paupers on the street either.

If you’re one of those caught in the loss-of-assets trip today, you might want to consider “rightsizing”. That’s adjusting your style of living to fit the number of resources you have left on which to live. I’ve done it and it works. It’s doable in almost any circumstances if you put your mind to it. All it takes is some adjustment in lifestyle.

Is Social Security a “Federal Benefit”?

The government can call my Social Security a “Federal Benefit” but that is a bunch of balderdash. I paid into the system almost from Day 1 and most years the maximum required. The same with Medicare. The Veterans Administration provides most of my medical care. I paid for that with three years out of my life on active military duty.

Furthermore, I do not consider any of the financial assistance I get from any of the programs an “entitlement”. I earned them the hard way – honestly with my own blood, sweat, and tears.

There’s no time to listen to all the political monkey dust being tossed about implying we are not getting our fair share these days. I have lived and worked under a system that gave me the freedom and opportunity to make my own way and I gave it my best shot.

When circumstances produced less-than-satisfactory results I chalked it up to the way the system works. It isn’t always fair, nor was it ever guaranteed to be.

Having said that, scholars have proven that more seniors are struggling with financial hardship. According to a University of Massachusetts study, most seniors’ social security checks don’t even cover their basic cost of living.

For most of you who find yourselves retired today, what we have to live on now is going to be about all we ever have. All we need to do to enjoy life from here on out is to simply tread water and enjoy the days we have left. And hopefully, avoid economic collapse.

I am!


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