31 Aug Bankruptcies Increasing Among Older Americans
Bankruptcies Increasing Among Older Americans
New research from the Consumer Bankruptcy Project found that more seniors are filing for bankruptcy than ever before. Bankruptcy filings for those age 65 and older are up by more than 204% from 1991, and seniors now make up the biggest share of bankruptcy filers of any age group.
The problems stem from decades of declining and failing pensions, rising medical costs, stagnant wages, and an overall lack of retirement savings. The report cites financial risks shifting from the government and employers on to individuals. For example, older Americans are now dealing with the replacement of defined benefit pensions with defined contribution accounts and increased out of pocket medical costs.
While bankruptcy can sometimes provide a fresh start for younger workers in financial distress, older workers often don’t get the same rewards. Younger people have many years to build up a savings again, but seniors often see their savings dry up with nothing to fall back on. Finding a second job or going back to work can be difficult, and the prospect of losing a home is inconceivable.
More than a third of seniors in the study cited helping others as a cause of their filing. Some are unable to pay back the exponentially high student loans they co-signed for their children, and others have taken on extra costs after becoming the main caretakers for their grandchildren or older parents.
The study finds that the overall trend signals an increasingly negative financial situation for retirees and older workers. “This is further evidence of the serious retirement security issues we face in our country,” said Richard Fiesta , Executive Director of the Alliance. “With so many seniors in dire financial situations, we must continue to work to expand Social Security and protect the pensions that seniors have earned over a lifetime of hard work.”