Most Texans want to have enough money saved in their retirement accounts before they retire. But financial insecurity can lead to an inability to budget and save for a time when a person may not be able to earn. Unfortunately, it seems that many more people nowadays may not be able to save for their retirement due to various financial challenges.
It seems that those who have a high household income, along with retirement savings, are usually highly confident about their financial future. According to a recent survey however, almost 50 percent of people who did not have a retirement plan were not assured of their finances. The report also stated that almost 36 percent of workers whose households earned less than $35,000 a year did not have more than $1,000 in savings.
Data from the Consumer Financial Protection Bureau reveals that older consumers have a larger mortgage debt than in the past. This debt may be related to the refinancing boom and housing bust. Now, almost 30 percent of homeowners aged 65 and above had mortgages in 2011, which has increased by 22 percent since 2001. Similarly, an increase in mortgages has been reported for those above the age of 75.
A home is an essential asset for most citizens, including older residents in their retirement years. It can be a place of security and also a valuable asset. However, rising mortgage rates indicate that seniors may be at risk of losing their homes. Along with their mortgages, many older Americans may also have to deal with health issues, medical bills and other expenses. Therefore, many people will try to build up their finances and repay their debts as early as possible.
Any person who faces the risk of losing their home may choose to file for Chapter 13 bankruptcy. Under Chapter 13, the debtor is allowed to reorganize a percentage of their debt into a three or five year plan. This enables the individual to pay the debt based on a formula. If the person follows the plan, the remaining debt may get discharged when the repayment period ends. This may ensure that the person retains possession of their valuable assets, including their home.
Source: Dallas News, “Rethink your finances and retirement risks,” 25 June 2014