The senior years of life are supposed to be free of financial struggles and come with a comfortable retirement. It is a time to worry less about money and enjoy the fruits of working for so many decades. Unfortunately, this has become less of a reality for the aging American population.
In fact, more and more seniors are turning to bankruptcy. The rate has doubled for those 65 years old and up and tripled among the elderly 75 and over, shares U.S. News and World Report. The average age of someone filing for bankruptcy has also increased from 44.4 to 48.5 years old. What are the reasons for these changes?
Causes of bankruptcy for seniors
Older Americans are less likely to have debts from student loans and mortgages. The biggest cause appears to be from income problems such as the following:
- Not receiving enough money from retirement to stay afloat
- Losing a job, often for health reasons or possibly from age discrimination in the workplace
- Wages or salary going down due to cuts, or not going up with inflation
- Not qualifying for Social Security, which is also struggling with long-term funding
The economic gap among seniors is widening due to years of inequality. Another contributing factor is medical expenses, which makes sense as the elderly are more likely to experience major health problems that require expensive care. Combined, the two issues raise the chances of bankruptcy.
Solutions for seniors
Numerous suggestions exist for reversing the trend as a whole, such as reforming the Social Security program, increasing financial literacy to older Americans and improving health care. However, it would take years to implement these changes and see results.
In the meantime, seniors have other debt-relief options available at a personal level, besides bankruptcy. It is wise to seek professional guidance to ensure which route is right for the circumstances and to avoid any debt-relief scams.