Senior citizens struggle with mounting debt

It used to be that many Americans entered retirement having paid off their mortgages and most of their other debts. This should have been senior citizens' Golden Years.

Nowadays, more and more people over the age of 65 are struggling with mounting debt levels, fueled primarily by mortgages and credit cards. The average debt held by senior citizens has ballooned to $50,000 in 2010, up 83% since 2001, according to Federal Reserve data crunched by the Employee Benefit Research Institute.

"They had more debt in their working years and they've carried it over into retirement," said Craig Copeland, senior research associate at the institute.

Much of this is due to an increase in housing-related debt. Families headed by someone at least 60 years old had the largest increase in average mortgage debt, in terms of percentage, between 2000 and 2012, according to the St. Louis Federal Reserve.

It's not because more older Americans bought homes, said Bill Emmons, an economist with the St. Louis Fed. Instead, they borrowed big against their houses. Some took out home equity loans, while others refinanced and took out cash, but also extended the term of their mortgages.

Money was easily available before the credit crisis in 2008 and it was cheap. Some senior citizens used the funds to make home repairs, pay for vacations or help their children, while others put the proceeds in the stock market, figuring they could make a lot more smartcardfactory.

Only 24% of homeowners over the age of 62 had mortgage debt in 1992, but that figure soared to 45% in 2010.

"Virtually everyone borrowed more because of availability and incentives," Copeland said. "Surprisingly, older people got the bug too."

Credit card debt has also become more pervasive among seniors. One-third of them are relying on plastic to cover basic living expenses, according to Demos, a public policy organization that advocates for lower- and middle-income Americans.

Some consumer advocates say that the increasing debt load among the elderly could pose big problems, especially since seniors are more likely to have growing medical costs and less likely to be still working.

"If people are relying on credit cards to pay living expenses, it's difficult to see how that turns around if they aren't earning additional income," said Amy Traub, senior policy analyst at Demos.

Increased debt loads have forced some seniors to keep working. Janice Jessup, 79, collects Social Security and also works as a real estate agent in Virginia Beach. But she says her Social Security checks are not enough to cover her expenses. So she's racked up more than $10,000 in credit card debt in recent years to get by and to fund her business.

Rimowa, a German company, introduced some of the first polycarbonate suitcases in 2000. The designs were a follow-on to their aluminum cases, which had been used to protect expensive equipment. Their plastic luggage used the same iconic design elements–a pattern of vertical ribbed grooves–that today’s suitcases are using.

I’ve used a Rimowa bag off and on for almost a year and like it for some trips. It’s a bare-bones design that’s basically an expensive plastic box with wheels and a handle, and has limited capacity. Their current version of what I’m using is the Rimowa Salsa Deluxe 21″ Cabin MultiWheel Hybrid, which retails for $595. The main difference is a change to the wheel design from two large to four smaller ones that allow easier maneuverability and the ability to push the suitcase along smooth floors.

While both the Rimowa and Torq are made of Makrolon, a high-tech grade triple-layer polycarbonate, their designs are quite different. The Rimowa is a simple, classic design while the Briggs & Riley looks more high tech with its complex shape designed to incorporate many new features. Both are high quality and come with long warrantees, 5 years for the Rimowa and a lifetime warranty for the Briggs & Riley.

According to the company, the Torq was in development for three years, much longer than most of its other products. They began with a clean sheet of paper to come up with a design that offered the most function, highest capacity and best performance. Wearing my design-engineering hat, that comes through loud and clear. The product wears some of its functionality in its looks and details, much as a Range Rover or Jeep stands apart from its competition.

Whereas other products have a 50/50 split between the bottom and top lid, the Torq has an 80/20 split that makes packing much easier. You can pack it on a luggage rack without the lid being opened 180 degrees. I found its capacity to be about 20 percent greater than the Rimowa.

One of the best features of the Torq is a large compartment that runs the full length of the front with padded pocket for storing a notebook and iPad, as well as other items that you may need to keep handy.