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Still paying college loans with your social security check? Believe it!

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  • Still paying college loans with your social security check? Believe it!

    This is a very interesting and common sense read from a university professor on the craziness of student debt:

    http://walterwendler.com/
    How can you have any pudding if you don't eat your meat?

  • #2
    Not surprising. Many parents and even grandparents borrow money to help pay for college for their children or grandchildren. Or, as noted in the article, they cosign loans so that debt is legally theirs.

    The percentage of seniors with mortgage debt is also on the rise.

    People are just borrowing their way through life, even right up to the end.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    Comment


    • #3
      I know quite a few folks my age (59-1/2) and older that have recently borrowed large sums for new homes, and still borrow for every car they buy.
      They just figure payments are part of life.

      Comment


      • #4
        Hey I'm 53 and borrow for cars and houses. I just bought a Lexus RX for $50K @ 1.9 percent interest. Why would I give them my $50K and kiss that goodbye?
        How can you have any pudding if you don't eat your meat?

        Comment


        • #5
          Originally posted by TexasHusker View Post
          Hey I'm 53 and borrow for cars and houses. I just bought a Lexus RX for $50K @ 1.9 percent interest. Why would I give them my $50K and kiss that goodbye?
          TH - whereabouts in Texas do you live?
          james.c.hendrickson@gmail.com
          202.468.6043

          Comment


          • #6
            Originally posted by TexasHusker View Post
            Hey I'm 53 and borrow for cars and houses. I just bought a Lexus RX for $50K @ 1.9 percent interest. Why would I give them my $50K and kiss that goodbye?
            Borrowing money strategically and putting your cash to better use elsewhere is smart.

            Borrowing money because you've never done anything to build enough wealth to live on in your later years is not so smart.

            The current rate on Federal undergrad student loans is 4.53% and for parent PLUS loans it's 7.08%. And the rates on private lender loans are often higher. Those seniors still carrying student loans may be paying upwards of 7%. That's not such a bright idea, especially if your main source of income is SS. And if they are also paying 4% on a mortgage and maybe carrying a car loan at 3%, that's a problem.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


            • #7
              Originally posted by Fishindude77 View Post
              I know quite a few folks my age (59-1/2) and older that have recently borrowed large sums for new homes, and still borrow for every car they buy.
              They just figure payments are part of life.
              There is a difference for some here borrowing strategically and those whom simply think debt is normal and nothing to avoid.
              I see a bunch of people taking large loans when the term of loan will go far past their retirement age.
              I have seen so many loans made to some I wonder what are these banks thinking they obviously did not check anything.

              I simply do not know how any student could face their whole family if they left grandma or grandpa on the hook by not paying? Where is the responsibility?
              Are they going to co-sign grandparents retirement?

              Some may be their own debt as I saw many people go back to school to get ANY degree as some promotions etc at jobs require some sort of degree.
              I worked with people who took classes in hopes to use for that and then lost interest or did not get the promotion but still have debt involved in these classes.

              Comment


              • #8
                Originally posted by Fishindude77 View Post
                I know quite a few folks my age (59-1/2) and older that have recently borrowed large sums for new homes, and still borrow for every car they buy.
                They just figure payments are part of life.
                Emotion ("I want my own house.") often overrides fiscal prudence.

                Comment


                • #9
                  Contrary to common belief, a lot of folks now upsize their homes in retirement. If we move to Florida, we will definitely buy a more expensive house than the one we have now. Probably around double the price.
                  Steve

                  * Despite the high cost of living, it remains very popular.
                  * Why should I pay for my daughter's education when she already knows everything?
                  * There are no shortcuts to anywhere worth going.

                  Comment


                  • #10
                    Originally posted by disneysteve View Post
                    Contrary to common belief, a lot of folks now upsize their homes in retirement. If we move to Florida, we will definitely buy a more expensive house than the one we have now. Probably around double the price.
                    Interesting. My ex-wife and I both just downsized.

                    Comment


                    • #11
                      There's another misnomer about having a "paid for" house. If you think you don't have to keep paying to live there, trying skipping your tax payment once or twice. They will auction your property off at the steps of the courthouse.

                      This week, I visited at length with a woman whose family lives in a small town about an hour outside of New York City. They have a 2800 square foot home that is paid for, but their township, county, and state taxes are a staggering $65,000 per year. So even if they had a mortgage, it would be just a fraction of their monthly obligation, most of which goes to pay taxes.

                      Whether we care to admit it, we are all renters.
                      How can you have any pudding if you don't eat your meat?

                      Comment


                      • #12
                        Originally posted by Fishindude77 View Post
                        ...and still borrow for every car they buy. They just figure payments are part of life.
                        Count us in that category, too. We are in our 60's. The last vehicle we purchased was financed with a 0% loan. We could have paid cash, but I couldn't see much advantage to it.

                        Comment


                        • #13
                          There is some truth to "your house is never paid for" with taxes, upkeep, etc. but in most cases those expenses are pretty minor compared mortgage payments. Your overall costs to live with a roof over your head are much cheaper without the mortgage.
                          The 0% or very low percentage car loan makes sense too, but don't you think somebody is getting paid for that borrowed money somehow? Maybe the interest was concealed in the purchase price? Lenders have to be getting a return on that money somewhere.

                          So what's the end game for somebody 60-65ish near the end of their working career operating like that? Carry a mortgage till 90-95?

                          Comment


                          • #14
                            Originally posted by TexasHusker View Post
                            There's another misnomer about having a "paid for" house. If you think you don't have to keep paying to live there, trying skipping your tax payment once or twice. They will auction your property off at the steps of the courthouse.
                            The same could be said for your car. Just because you don't have a loan on it doesn't mean you don't have to pay for registration, inspection, and insurance. So yes, there are costs to owning a home even if you have no mortgage.

                            Still, there is a fundamental difference between debt and upkeep costs.
                            Steve

                            * Despite the high cost of living, it remains very popular.
                            * Why should I pay for my daughter's education when she already knows everything?
                            * There are no shortcuts to anywhere worth going.

                            Comment


                            • #15
                              Originally posted by Fishindude77 View Post
                              There is some truth to "your house is never paid for" with taxes, upkeep, etc. but in most cases those expenses are pretty minor compared mortgage payments. Your overall costs to live with a roof over your head are much cheaper without the mortgage.
                              The 0% or very low percentage car loan makes sense too, but don't you think somebody is getting paid for that borrowed money somehow? Maybe the interest was concealed in the purchase price? Lenders have to be getting a return on that money somewhere.
                              Yes, that is true. The bank always makes it a point to get paid.

                              Originally posted by Fishindude77 View Post
                              So what's the end game for somebody 60-65ish near the end of their working career operating like that? Carry a mortgage till 90-95?
                              That is difficult to figure out because it exceeds the average life span.

                              Comment

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