Overwhelming debt making retirement saving difficult

May 17, 2011

Due to financial stress, many seniors are unable to live out their retirements the way they had originally planned.

Though some believe the economy is rebounding from the recession, according to the recent PricewaterhouseCoopers Financial Wellness Survey, many individuals are still finding it difficut to make ends meet.

The survey included 1,610 adults who make at least $30,000 a year, and found that almost half find it difficult to pay their household expenses by the deadline - up from 43 percent in 2010. Issues with paying the bills did not appear to be confined to the lower end of the income range. The source also reports that 36 percent of respondents with incomes of $100,000 or more reported encountering the same problem.

A number of individuals are also relying on credit cards to make monthly payments, the source says. Nearly 24 percent reported not being able to afford their bills without using credit cards. Therefore, many Americans are building extra debt in an effort to make ends meet - a practice making retirement savings nearly impossible.

Those in this situation may find it beneficial to have a life insurance policy. For those with whole life insurance, the cash benefits may be useful during a time when cash is low. Term life insurance can be equally useful, as debt can survive an individual's death, placing an added burden on their family members. Having the funds from the death benefit of a life insurance policy can be used to cover outstanding debts and funeral expenses as well as help surviving dependents manage following the loss of a breadwinner.  

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