They can't afford to work and live to make ends meet.
Bankruptcy among Americans, 65 and older, is three times higher than what it was in 1991.
That’s according to the Consumer Bankruptcy Project. With an increase in medical costs, longer lifespans, and less government assistance, retirement is slowly becoming obsolete.
“The social safety net for older Americans has been shrinking for the past couple decades,” the study says. “The risks associated with aging, reduced income, and increased healthcare costs, have been offloaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher.”
Reasons for older Americans to declare bankruptcy
Older Americans are filing for bankruptcy due to a job loss, a decline in income, and medical bills, the study says. Some respondents mentioned how they worked into retirement but sometimes bosses weren’t interested in keeping them.
“All things went up in price,” one survey respondent says in the study. “Retirement never went up. Had a part-time job that was helping to meet monthly payments. House payment kept going up. Was fired from my part-time job that I had for over 10 years without any warning. Being 67 and having back problems, not many people will hire you even as [a] part-time worker.”
The road to bankruptcy is long, and even longer for older Americans. Twenty percent say they struggled to get their finances in order for five years or more to avoid bankruptcy. When it comes down to assets, older bankruptcy filers have $90,476. Meanwhile, their non-bankrupt peers report having $252,500. Income was lower as well — bankrupt filers report having an average income of $6,000 less than their non-bankrupt peers.
Older Americans may find no other choice but to file for bankruptcy. However, it’s not as forgiving for them as it is for younger groups.
“For older Americans, bankruptcy is too little too late,” the study says. “By the time they file, their wealth has vanished, and they simply do not have enough years to get back on their feet.”
Bankruptcy is a very serious decision to make and should be consulted with an expert. Check out Weighing the Pros and Cons of Bankruptcy.
Don’t let debt hold you back from a happy retirement. Let Debt.com connect you with the right accredited debt relief service for your needs.
Learn from your elders: take care of yourself now for later
There’s a lot of focus on millennials and young people preparing (or not preparing?) for retirement, and for good reason. There are plenty of lessons from older Americans about how a lack of preparation can set us up for failure when we’re older. Just as the Consumer Bankruptcy Project study points out.
Debt.com has previously reported that older Americans can’t afford basic things, like food and healthcare. Two-thirds of seniors aren’t able to pay for nutritional food and earn too much money to qualify for government assistance. This only increases their likelihood to develop health issues later in life, which sets them back even further financially.
This also puts those of retirement age out of actual retirement. Half of Americans are planning to delay retirement until at least 70 years of age because they aren’t sure how they can afford to be out of work.
Millennials are taking notice. They might be delaying homebuying, but their money management skills are proving to be better than their elders. More than a quarter of millennials have $100,000 saved for retirement right now, with decades left until they hit retirement age; 61 percent have at least $25,000 already put away.
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Article last modified on September 21, 2018 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Older Americans Are Ending Up Bankrupt - AMP.