NEW YORK ( MainStreet) -- Bora Paloka, a 65-year-old former hairstylist in New York City, is not living the type of retirement her husband and she had always imagined. For the past five years, the couple has been using welfare money to cover basic monthly expenses, and to make matters worse, the credit card debt she entered retirement with has ballooned.
Saving enough money to retire comfortably has long been the goal of the American worker as pension plans have disappeared. But now an added wrinkle complicates the scenario for those like Paloka: retirees are increasingly entering their golden years with crippling debt.
Households headed by those 75 or older saw debt double to $27,409 in 2010 compared to $13,665 in 2007, according to the Employee Benefit Research Institute (EBRI). And it's not just mortgage debt that poses the problem: credit card and student loan debt are stifling retirees' plans for leisurely days on the golf course followed by 5 o'clock margaritas.
Coping with this sort of debt does not leave Americans in a solid position to exit the workforce: 82% of workers aged 60 and older expect to or are already working past age 65, according to the May 2015 survey of the Trans American Center for Retirement Studies. Among them, 56% believe they will not be able to afford to retire because of their income or health benefit requirements.
Of course, for those forced into an early retirement, the obstacles increase: life expectancy has lengthened, and the typical consumer needs to be able to cover costs incurred during 30 plus years of retirement.
The best way for Americans to tackle debt in retirement is to develop a strategy and time line so they can attack the most troublesome debt first. It's also important for them to consider taxes, retirement portfolio withdrawals and income streams so that they don't outlive your money or leave heirs with outstanding loans.