I love that television commercial where a suave elderly man walks towards the camera speaking in a calm dignified voice, "If you (congress) are planning on cutting medical or social security benefits remember we will be watching. There are 50 million of us."

Senior citizens are no longer a small minority that can easily be ignored. We have considerable power, as in political power. The economic side of things is a different story. We've been slip sliding down the slippery slope of indebtedness too.

In a 2009 study by Statistics Canada it was revealed that 34% of retired individuals aged 55 and over, whether single or in a couple, held mortgage or consumer debt. The median amount owed by these individuals was $19,000.

Debt loads were much higher among those in the same age group who had not yet retired. Among pre-retirees aged 55 and over, two-thirds held mortgage or consumer debt and their median debt load was $40,000, double that of retirees.

Among retired people with debt:

  •  25% owed less than $5,000
  •  32% owed between $5,000 and $24,999
  • 26% owed between $25,000 and $99,999
  • 17% owed $100,000 or more.

Divorced people (43%) who were retired had the highest incidence of debt. They were followed by people in a couple (35%), those who never married (30%) and widows or widowers (28%).

The financial picture today differs from our parents who often posted a sign up on their kitchen wall, God Bless our Mortgaged Home. The message contained a sarcastic undertone about debt and meant they really didn't own it (as long as there was a mortgage outstanding against it.) This was also the era of mortgage burning parties where people would invite friends and family over to watch them burn their mortgage in the fireplace after it was paid in full.

Even seniors from this proud debt-free generation would be destined for a twilight rendezvous with poverty. I recall one such family who owned a clear title farm in Aldergrove, British Columbia. One of their four sons, who married and had four young children, ended up moving back home with Mom and Dad for financial reasons. They couldn't make ends meet.

A few short years later the now mortgaged house was sold to clear onerous debt obligations incurred by the son. This necessitated a move farther away to cheaper properties in Kamloops and then Vanderhoof where the house was finally sold and all of the remaining equity spent on the son's debts. The son then divorced and disappeared from the province. The parents died in poverty.

I saw the following provocative story a few years ago on-line.
"I'm 91. Once I was an educator and had a decent life. What I am today? An abused senior. Oh, please don't tell anyone. If my kids find out I've been talking, there'll be hell to pay. I don't want them to get into trouble.

Everyday it gets worse-last month I had $300,000 in savings. Now there's only $5000 left. It's so hard to say NO to them. They yell and use the F word. I don't know where they learned to talk like that. I'm so ashamed."

Seniors have a well-established reputation for being subjected to countless frauds, schemes and a long list financial abuses that are inflicted by children or relatives.

P. Beaupre, Pierre Turcotte and Anne Milan published through Statistics Canada a paper entitled, Junior comes back home: Trends and Predictors of Returning to the Parental Home that gave new insights into the impoverishment and indebtedness of parents - Adult children moving back home.

Based on 2001 data they found out that among Wave 1 Boomers (born 1947-51), the probability of returning home within five years of first leaving was less than 12% for men and 10% for women. In contrast, the probability for the later wave of Generation Xers (born 1972-76) was 32% for men and 28% for women.

In other words, for both men and women, the likelihood of coming back home has nearly tripled.

Reasons for this return to the nest included:

  • increasing acceptance of common-law relationships (since such unions are more likely to break up than marriages);
  • the pursuit of higher education, which tends to leave young graduates with heavy student debts;
  • financial difficulties;
  • the reduced stigma attached to living with parents;
  • wanting a standard of living impossible to afford on their own; the new and different roles of parents and children in families;

This scenario truly reflects the modern world and how parents loose their financial freedom by picking up the tab for many of the deficiencies that inhibit their children's climb to up the economic ladder like student loans and marital breakdown.

Marital breakdown occurs with seniors, too. Their divorce rate has been catching up with the wider society with similar consequences and financial losses. One less visible effect involves the next generation and their future education and chances to own property. In other words, what happens to the seniors from this generation affects the next. If they spend, squander or are otherwise duped out of their estates, this robs the next generation.

Gambling and seniors have a long dubious past. Research has discovered that the majority of older adults who are gambling at problematic levels do not consider themselves to have a gambling problem. Other studies reveal that many seniors gamble for "pleasure" and "the opportunity to socialize."

Gambling can turn from an innocent past-time into a problem for the individuals and others around them. Sometimes, circumstances in the person's life have changed (such as death of a spouse or change in health). The person relies on the gambling activity as a way of dealing with boredom or escaping loneliness. Seniors who developed problems state they gambled to "escape problems," because they "needed the money," and because it "was a place they could go where they would not be judged." Generally, the theme of "loneliness" among seniors is cited as being a major reason why they gamble.

Little attention is placed on the gigantic losses that occur and or end up on credit cards.
The preceding illustrations introduce a few factors to consider in assessing the financial problems that plague seniors. Retirement incomes have not kept up with inflation and taxation. Medical and dental benefits have been eroding due to cut backs by governments in delisting medications and pension benefits being reduced which have resulted in death by a thousand cuts for far too many people."

As suggested in the beginning, seniors are a significant political group in Canada and the United States. We need to better understand the dynamics of an instant gratification culture that has abandoned prudent financial principles like paying off the mortgage and debt freedom.

If you would like to learn more about the instant gratification culture see Almost Empty at http://www.chateaulanepublishing.com/ and/or add your voice to the Golden Voice Blog.