It's a glorious time. No one has yet persuaded you to join up to the burden of the home loan. There are no small children pulling at your purse strings or heartstrings. Your own parents are still independent.

But then something horrible happens. Not horrible like you are dying.

But hideous in that you have to count every single penny. You plan for when you can pay the monster power bill (and believe me they were big before the carbon tax, so stop whingeing). The money goes before it's meant to and never goes as far as it should.

And then what should happen is that the kids leave home, you still have a job and it's a few more years before you need to start supporting your parents.

The carefree years. The kick-up-your-heels-and-dance-nude-down-the-hallway years. The years when if you want to eat out at the three-hat restaurant you can do it, without feeling guilty about everything the kids need yesterday.

But new figures released by Insolvency and Trustee Service Australia show that the rate of bankruptcy in people over 60 has nearly doubled, from 7 per cent in 2003 to 13 per cent last year. What's worse is the level of personal debt those people had. About half of them had the kind of debt you normally find on credit cards, what banks describe as unsecured debt.

And what did these people owe? More than $50,000 each. Another quarter owe more than $100,000.

Plus, who is not surprised to know that the greater the number of credit cards owned, the greater the debt? I gave up credit cards about six years ago to protect me from my shockingly materialistic inner self. I still have the fantasies but fortunately no way to realise them any more.

Still, it's terrifying. Here we are, when we are meant to be On Golden Pond (recommend this 1981 film with Henry Fonda and the incredibly beautiful Katharine Hepburn); instead we are in deep, deep water.

How did it come to this? Are seniors in hot water when it comes to money and its management?

Ian Yates has been chief executive of the Council on the Ageing (COTA) for more than 20 years. He says there are so many reasons why older Australians struggle, from family break-up to losing jobs.

But there is another significant difference in the past decade - more Australians who decide to retire still have a mortgage, a huge financial drain on those whose income is limited.

Yates wishes more older Australians would seek financial advice - but he knows that there is some resistance from retirees when it comes to paying for that kind of information.

''A large number of people don't have any kind of plan about what financial resources they might need and for how long,'' he says. What he really means is we don't make the appropriate calculations to make the money last until we kick the bucket. Sorry to be brutal here - but rather now than when you go bankrupt.

And Yates is tough, too: ''How much capital do you need to live the life you are prepared to live?''

So, that's it really. What compromises are you prepared to make in your retirement? Happy to swap Silo bread for the dollar loaf? Happy to have holidays at home? If you are not, you need probably need to work longer. Eek. And here was I dreaming about retiring at 50 (which is what the generation of women above me certainly did).

And Michael O'Neill, chief executive of National Seniors Australia, has some scarifying news that may be another reason why older people go broke.

If you lose your job when you are 20, on average it takes you another 20 weeks to find new work. If you lose your job at 55, it takes nearly 70 weeks to replace it. Most of us don't have 70 weeks' worth of pay sitting in the bank waiting for an emergency. We run out of money pretty quickly.

It's all well and fine for the federal government to be optimistic about increased participation by older workers - but the state of re-employment for that group is hard work.

Both O'Neill and Yates are desperate for older Australians - all Australians really - to be able to understand how money works. I refuse to use the common expression ''financial literacy'' because I think it mystifies what it is we should know.

What do we have coming in? What do we have going out? How do we know that where we put our money is really safe? Can we trust financial advisers? How can we check on those people to make sure they aren't being paid off by scammers and charlatans? How do we avoid putting all our hard-earned into someone else's corporate collapse? Aiiieeeee.

Yates says we absolutely must exercise caution when we use our money. And take good advice. O'Neill has one more tip. Your kids have always asked you for money. It's a habit they get in to when they are small. But once they are adults with the means to support themselves, you can say no.

Don't be giving it away. Not just yet anyway.

■ Follow me on Twitter @jennaprice or email jenna_p@bigpond.net.au.