Grand Rapids, MI -- (SBWire) -- 04/04/2013 --Many of us find it difficult to stay abreast of everything that is happening financially in the world today. Dennis Tubbergen, a financial advisor, author, radio show host and CEO of PLP Advisors, LLC can be counted on to give a hand when it comes to understanding the latest events in U.S. and world economics.

Whether people enjoy his weekly newsletter at www.moving-markets.com or his blog at www.dennistubbergen.com, Tubbergen is dedicated to sharing his viewpoints and opinions. On March 26, his blog was titled U.S. Seniors Carrying More Debt.

"The Wall Street Journal published a commentary piece that pointed out that American seniors are carrying more debt than in the past," began Tubbergen.

Tubbergen quotes below from the March 23, 2013 article in the WSJ.

America's seniors are becoming more likely to fall into debt -- and saw the biggest jump in borrowing relative to other groups over the past decade.

The median level of debt among households led by someone 65 and older -- the level at which 50% of older households are above and 50% are below -- more than doubled between 2000 and 2011 from roughly $12,000 to $26,000, according to a U.S. Census Bureau report released Thursday. While that might not sound like a lot of debt, America's seniors saw a much bigger jump in percentage terms than any other age group.

The report raises concerns about the financial health of older Americans at a time when more are worried they lack the savings and investments to retire comfortably. The recession took a bite out of many seniors' nest eggs, mainly through plummeting home values. Meanwhile, fewer Americans are saving as much for retirement even though pensions are disappearing. And the Federal Reserve's strategy for spurring the economy -- low interest rates -- has the unintended impact of reducing returns for seniors on safe investments like U.S. Treasury bonds.

It's true that older Americans tend to be wealthier and survived the housing crash in better shape, so they can handle more debt. Younger people still owe more relative to their incomes than older people. Seniors are also staying in the labor force longer, making paying off debt easier. And Americans' debt payments are actually at their lowest level in decades relative to disposable income.

It's also not just seniors. People ages 55 to 64 saw their typical or median household debt rise 64% to $70,000. Younger people are borrowing much more to pay for college. Those under 35 saw their typical debt rise 13% and people between 35 and 44 saw their own climb 25%. Overall, the typical U.S. household's debt rose 37% between 2000 and 2011 to $70,000.

Still, the new figures show American seniors have grown much more likely to be in debt -- even as other groups have become less likely to have debt. People 65 and older were more likely, for example, to have a mortgage in 2011 compared to 2000, while people under 55 were less likely to have a mortgage -- or any debt. For seniors, the typical level of "secured" debt -- including mortgages -- jumped from around $25,000 to $50,000.

Older households "are less likely to own their homes free and clear than was once the case," said Richard Fry, a researcher at the Pew Research Center. Increased homeownership by seniors may explain some of the jump, but older Americans over the past decade also ramped up their use of 'home-equity' loans, where consumers borrow against the equity in their homes, he said.

"Over the last 11 years, median household debt among those age 65 and over has more than doubled," explained Tubbergen. "Those age 65 and over are less likely to own their homes free and clear than in the past."

According to Tubbergen, this trend is not just a trend among those age 65 and over. The typical household's debt rose 37% over the same 11-year time frame to $70,000. Those higher debt levels do not bode well for robust economic recovery any time soon.

"On the other hand, there was one bit of apparent good news in the article," noted Tubbergen. "The debt payments of Americans are actually at a fairly low level when compared to discretionary income, historically speaking. While this may suggest that consumers have capacity to acquire more debt and further fuel economic growth, I believe it suggests something quite the opposite."

Tubbergen goes on to say that as median incomes have declined over the past 5 years, debt levels relative to those income levels have also declined.

But why they have declined?

"Individuals have been focusing on paying down debt and banks have slowed lending, a normal course of action in a winter economic season," concludes Tubbergen. "When the financial system reaches its capacity to handle debt, those ratios HAVE to decline; they can't continue to increase."

To read the blog in its entirety go to http://www.dennistubbergen.com and select his March 26, 2013 entry.

Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.

About Dennis Tubbergen
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to www.moving-markets.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.