Many seniors are buried in debt. Six tips to dig out of it.

Nearly 4 in 10 seniors carry a mortgage, almost double the rate in the mid-1990s. With no boost in housing prices or Social Security benefits, indebted seniors face a squeeze. 

By , Contributor

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    Katharine Roberts (right) and Nelly Falcon sit at the Canaan Senior Service Center in New York in this 2009 file photo. With a rising portion of seniors with primary and secondary mortgages, debt is becoming an increasing worry for America's seniors. But there are ways to ease the problem.
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Senior citizens have faced an especially tough financial ride during these past few years, especially those living on a fixed income. There has not been a cost-of-living adjustment in Social Security since 2008. Retirement funds are shrinking as stocks decline, and banks are paying very little interest on CDs and savings accounts.

A significant number of senior citizens are buried in debt, especially with their mortgage. A recent study by the Strategic Business Insights' MacroMonitor found that 39 percent of the homes where the head of the household was between 60 and 64 years old had primary mortgages, and 20 percent had secondary mortgages. In 1994, those figures were just 22 percent and 12 percent respectively. Mortgage debt accounts for a very large share of these senior citizens' income. The future doesn't look very bright since home values are still depressed due to the housing collapse.

The golden years of retirement have turned into a major struggle for many seniors. Here are six tips for senior citizens trying to climb out of debt:

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1. Get a part-time job if you are healthy enough to work. Bringing in additional income can help you pay down your debt or offset some of your living expenses.

2. Cut down on the number of credit cards. You only need one or two to make everyday purchases. Too many seniors have many more cards than they need. It is too easy to charge things you can't afford if you have multiple cards.

3. Do not use home equity loans to pay off credit card debt or to buy things that depreciate such as trips, cars, and appliances.

4. Stay away from debt-relief companies that promise to cut your credit card bills and other monthly payments. These companies charge high up-front fees and can put you in a worse financial situation.

5. Protect your finances against possible fraud or abuse. If you have someone else handling your bills, let a trusted third party monitor your bank account and credit activity. Consider giving power of attorney to a trusted person who can oversee your financial affairs if you are unable to do it.6. If you feel you need a debt counselor in your area, contact the National Foundation for Credit Counselors at 800-388-2227 or www.nfcc.org

– Bill Hardekopf is founder of Lowcards.com, a credit-card information site.

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