Financial difficulties tarnish golden years

On a crisp fall day recently in Richmond's Church Hill neighborhood, laughter rang out from inside the Linwood Robinson Senior Center on North 26th Street.

Seated at rows of tables, about 21 people played cards and dominoes, put together a puzzle, knitted a scarf, sat quietly, mingled in small groups or watched an oldies group sing and dance on a big-screen TV.

Most seemed happy.

But all was not well for everyone at the center.

Like millions of older Americans nationwide, some are experiencing financial difficulties that have spoiled their golden years. Some have landed in bankruptcy court.

Their investments have plummeted along with the stock market, so they have smaller portfolios. Medical bills keep rising.

Their 401(k) plans didn't exist when many of them worked, so their biggest asset is their home. But home values have dropped -- in some cases by tens of thousands of dollars -- and many can't sell their home and use the proceeds to live in a retirement facility.

They are a group under pressure -- people 55 and older who feel financial pinches more acutely than younger age groups, said Ginger Thompson McDaniel, an AARP associate state director in Richmond.

Some are even forced to file for bankruptcy.

"It's not surprising that older people are struggling more in the current economic climate than others may be," McDaniel said. "Seniors have a harder time adjusting to financial difficulties because they're on a fixed income."

Consider Camilla Curry, 57, who lives in Church Hill.

She fished from her pocketbook a fistful of overdue bills, some more than $1,000. She has an inoperative 2000 Chevy Malibu and no money to fix it. So she takes the bus to her 20-hour-per-week job at the Linwood Robinson center, where she makes the minimum wage under a government-assistance program.

Curry lives in a three-bedroom house that her son recently moved out of, leaving her to make up what he paid in rent. She can't move because she can't pay off the security deposit.

She also can't go out and find more work because she's not allowed to work extra hours under the job program. She gets by, she said, "by robbing Peter to pay Paul." Sometimes her sister in Maryland helps her pay the bills. "It's just a constant thing," Curry said. "It is almost like we are left out there to perish."

. . .

Curry is not alone in her struggles.

Some, for instance, who live in the Heartfields Assisted Living at Richmond worry whether they're going to live another 15 or 20 years and if their money will last, said Linda Bourgeois, the retirement community's marketing director.

Medical bills are another culprit that trashes the finances of older Americans, said Patrick Keith, an attorney with the Boleman Law Firm, a bankruptcy law firm on West Laburnum Avenue in Richmond.

"It's amazing how much money has to come out of their pocket," he said. "We can see people paying $500 to $1,000 for prescription drugs" a month, while getting only a $1,300 Social Security check, he said. "The numbers just don't work."

AARP's McDaniel said "older people spend more on health care per year, about $4,400 out of pocket" on average, than other age groups.

"Health care . . . is what triggers people into filing for bankruptcy," said Harris Spindle of Senior Connections, the Capital Area Agency on Aging in Richmond.

The problem is compounded when those who are financially strapped charge health costs on credit cards, Keith said, causing their credit-card debt to spiral.

The Employee Benefit Research Institute in Washington said the percentage of families headed by someone 55 or older with credit-card debt surged 38 percent from 2004 to 2007.

The biggest percentage increase of families with credit-card debt occurred among 55to 64-year-olds, the research institute said, increasing from 37 percent in 1992 to 50 percent in 2007.

The good news is, "the level of debt is expected to moderate given the tougher standards from many lenders for making loans," Employee Benefit Research Institute's Craig Copeland said.

The bad news is, "the high rates of debt are not likely to go down because many people are not able to pay down the debt they have already accumulated."

Mortgage debt devastates older Americans, too, Boleman's Keith said.

For many, their mortgage rate has adjusted sharply higher, and they're not in a position to make the new payments. With home values depressed, they've lost the option to sell their house, he said.

According to AARP, nationally more than 1 of every 4 foreclosures and delinquencies -- 684,000 in all -- involved Americans age 50 or older during the last six months of 2007.

Another factor adversely affecting older Americans is that many who worked have lost their jobs -- and it takes them longer to find new employment, if they ever do, McDaniel said. So it's more difficult to supplement their fixed income.

Also, rising utility costs add financial pressure, she said.

Cathy Thomas, bill-pay coordinator for Jewish Family Services Inc., is familiar with rising costs. She pays bills on behalf of older Americans and manages their finances in exchange for a fee.

Living costs are escalating, she said. Even for people whose rent is subsidized, "they get increases every year."

Also, this year there will be no Social Security increase, she noted. "That was like their yearly raise. They were counting on that money."

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Some seniors fall into such dire straits they wind up in Bankruptcy Court.

The 65-and-older group in 2008 represented about 7.3 percent of debtors in bankruptcy, but they were 13 percent of the U.S. population, said Leslie E. Linfield, executive director of the Institute for Financial Literacy in Maine.

It's bad when somebody in that age group goes bankrupt, said Linfield, an attorney.

"They may live another 10 or 15 years, but they may not have the ability to rebuild their wealth in order to support themselves for that period of time."

Almost 15.6 percent of bankrupt debtors were in the 55-64 age group last year, Linfield said, while they made up just 10 percent of the U.S. population. "They're in trouble. That's right before they're retiring."

In Virginia, in the Eastern District that includes Richmond, personal bankruptcies soared 40 percent during the 12-month period ended June 30, compared with 2008, said James V. Ingold, chief deputy clerk for U.S. Bankruptcy Court.

"It's certainly approaching a very high level," he said, but the court doesn't track how many of the filers were seniors.

Older Americans definitely were among the 33 percent more filers in the first 10 months of 2009 who streamed into the Boleman law firm to file for bankruptcy, Keith said, although he wouldn't say how many were seniors.

"When they come to us, it's this massive debt issue," he said. "We can help in the short term. But something needs to change, or they will wind up back where they were."

Contact Iris Taylor at (804) 649-6349 or .