We tend to have this idyllic image of what retirement looks like. It’s one of playing with your grandkids, enjoying leisurely holidays and living the life you want.
After all, shouldn’t you be able to live out your Golden Years as you see fit after working your whole life?
Unfortunately a growing number of senior American citizens find themselves facing bankruptcy instead. In fact, the number of Americans aged 65 years of age or older filing for bankruptcy has tripled since 1991.
This harsh reality explains why you see so many people in their 70s still working full-time jobs, like greeter, food delivery and customer service roles, for example.
At first glance this might appear to be elderly people wanting to retain their independence.
But it’s actually because they need to pay their bills.
So what has brought us to the point where our senior citizens are facing bankruptcy in such huge numbers?
1. The first reason is the vast majority of older Americans will experience reduced income in the latter part of their work lives. This is due in part to them reaching the age of retirement, but also possibly working part-time as they get older.
The net result is that while the cost of living steadily increases, their spending power decreases. So their dollar simply doesn’t go as far as it used to.
2. Another oft-cited cause for senior citizens having to file for bankruptcy is medical expenses, both their medical insurance and unexpected illnesses.
Increased medical expenses are part and parcel of the ageing process, but many senior citizens find themselves falling behind on mortgage payments and other bills because they have to choose between their health and their living expenses.
By the time they realize they need the help of the bankruptcy courts they’ve usually incurred thousands of dollars in medical bills.
3. Volatile economic conditions are another issue. Most people don’t realize this, but the recession of 2008 affected the baby boomer generation just as badly as it did their children. And what’s worse is that the fallout from the financial hit many of these citizens took a decade ago is still with them today.
What makes matters worse is that this generation doesn’t believe in trying to get rid of their debts, but want to instead pay them down.
4. A surprising number of parents are now co-signing loans for their children, including everything from car loans to student loans.
If and when their child then defaults on the loan, the financial institution then turns to the parents to keep up the repayments because they’re the guarantor. The problem is these loans are often in excess of US$100,000.
Obviously somebody in their 70s living on a pension will be incapable of paying a debt of that size – they simply won’t live long enough to do that.
Any combination of the above can and does lead to thousands of elderly Americans finding themselves in front of a bankruptcy court.
It only takes a missed payment here, and a late bill there, for this to happen. Debt has a habit of snowballing faster than a young person can earn money to repay it, never mind a person in their 70s.
In many cases their bankruptcy petition is an effort to either discharge the debt and/or to keep the roof over their respective heads.
But don’t wait until you’ve accumulated more debt – contact an experienced bankruptcy attorney today.
You could save yourself tens of thousands of dollars by doing so.