Our New York elder law estate planning attorneys are intimately aware of the way that long-term care planning and inheritance and retirement issues are interconnected. Helping with New York Medicaid issues is linked to long-term plans for one’s estate and long-term financial goals. It is crucial to have a plan that accounts for all of these issues, otherwise one may affect the other unexpectedly.
For example, many seniors are finding themselves struggling to receive the financial support and long-term care they need because of unexpected financial obligations–including from things like student loans.
Smart Money shared an interesting story today on challenges faced by seniors on Social Security as a result of, surprisingly, unpaid student loan debt.
The publication requested data from the Treasury Department to get an idea of individuals who are having their Social Security benefits withheld as a result of defaulting on student loan debt. They found that the number of affected residents is growing rapidly. Specifically, from the beginning of this year until today, about 115,000 retirees had deductions from their Social Security checks for outstanding student loan debt. That is compared to half that amount last year. Ten years ago there was virtually no deductions for this reason.
Legal professionals know that many seniors in this situation ended up there after trying to help children and grandchildren. Many individuals took on the debt to fund their children or grandchildren’s college tuition.
It is hard to underestimate the impact of this situation on those affected. One elder law attorney noted that he was working with an 83-year old client who took on the debt to help fund a son’s education in the mid-90s. He is now struggling to get by after seeing his social Security benefits slashed for the last five years. The elder veteran now struggles to pay for medications and other necessities on his limited budget.
The situation affects disability benefits as well. Many individuals who suffer accidents and become disabled are often hit with a double-whammy. They can no longer work because of the accident and fall behind on loan payments. Their Social Security disability checks are then slashed each month as a result of their payment defaults.
Well over 2 million student loan debtors are over sixty years old. A New York non-profit student debt advocacy group founder noted that “It’s really a unique problem we haven’t had to face before, and it’s only going to grow.”
It is crucial for all residents to get help with these issues, both before taking out loans or in dealing with the aftermath.
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