Beware of Financial Reversals
A Midwestern couple conscientiously paid off debts before retiring, only to have unforeseen problems force them to live off credit cards
Editor’s note: This is part 4 of a 12-part collaborative series between Next Avenue and Marketplace Morning Report.
With the encouragement of his wife Patricia, Norman Kietzer takes me to his small home office. We walk up a narrow staircase with a railing on each side for support. On one upstairs wall is a framed column that the Minnesota Star Tribune published last year. The headline: "Meet the Mankato man who helped change professional wrestling."
Kietzer's career in the wrestling business spanned more than 40 years. "I was a magazine editor for Wrestling Review and Ring Wrestling and different magazines," he says.
He got his start in wrestling when he was a student at Mankato State University in Minnesota. (The city of Mankato, which claims to be "The Soybean-Crushing Capital of the World," is about a hundred miles southwest of the Twin Cities.) A promoter asked Norman if he wanted to earn money helping to set up the wrestling ring at the local Armory. Kietzer soon started sending stories about different wrestlers to industry magazines and writing promotions for events.
"We were doing OK up until that time, but now we've just got too much on our credit card."
He worked in New York for a few years in the 1970s, writing for several wrestling periodicals. In the early '80s, he and Patricia returned to Mankato, where he continued to write, edit, publish and promote wrestling for almost two decades. At one point, the couple also owned a karaoke store.
Now in their early 80s, they find themselves in credit card debt. Mention older people carrying a balance, and there is often an unstated assumption that the money went toward wants rather than needs. Maybe they should have budgeted better, right?
The problem is that data shows that many older adults typically rely on credit cards to pay for necessities. And, at any age, life can throw an unexpected curveball that upends finances.
"They're taking it for basic day-to-day necessities, basic day-to-day expenses, and also unforeseen expenses, emergencies that they didn't anticipate," says Odette Williamson, a senior attorney at the National Consumer Law Center. "They could have lost a spouse. They could be dealing with a disability for themselves or a family member, they could be dealing with an illness, which means that they're out of the job market for an extended period."
When they were in their early 70s, the Kietzers sold their store for enough money to pay off the mortgage on the building that housed the store and to buy their home in Mankato mortgage-free.
Sometimes, 'Life Happens'
Nonprofit organizations like Habitat for Humanity and The Good Samaritan Society did work on their home to make it safer to age in place. Kietzer has fallen several times; had surgery to replace a knee; and learned that he has prostate cancer. Patricia and Norman live off Social Security.
They're also carrying a balance on two credit cards. The reason is "life happens." A grandson wanted to go in the Army and he needed a place to stay for a few weeks. The Kietzers helped out.
"It ended up he was here for eight months," Kietzer says. "He quit his job and didn't work, and he ate more than the two of us and everything, and we were doing OK up until that time, but now we've just got too much on our credit card."
The snowball effect of this debt means they no longer have a car. "Oh, I could still drive, but I can't afford a car," says Patricia. "My transmission went out."
They're pleased that their grandson is back on his feet with a job he loves. He's living on his own. To pay off their credit cards, they turned to Lutheran Social Services, a nonprofit organization with a certified financial counseling service.
"People come to us because they are looking for options on their unsecured debt," says Kim Miller, senior program manager of partnerships and financial education with Lutheran Social Services Financial Education.
Getting Back on Track
"We tend to get older Americans that want to come in to explore their options that way," she adds, "but mainly it's because their cash flow has been affected, and they're looking for ways to make things more affordable for the long term."
The Kietzers are in a debt-management program with Lutheran Social Services. The nonprofit organization negotiated a lower interest rate on their credit cards and they agreed to automatic monthly payments. "We don't have a terrible amount of debt, but we got to the point where we wanted to pay off some of these things," says Norman.
"They're looking for ways to make things more affordable for the long term."
Credit card debt has grown at a rapid clip for older cohorts. Credit card debt for older adults is twice what it was two decades ago, according to the Federal Reserve. A lot of that is attributable to life events that derail retirement plans for people without sufficient savings and resources to tap.
However, there are financial options to pursue, including reaching out to learn more by talking with credit counselors at a certified nonprofit organization. You can find reputable organization through the National Foundation for Credit Counseling.
Editor’s note: This article is part of our "Debt Free" series, a Next Avenue initiative made possible by a grant from the RRF Foundation for Aging.
