Senior Citizens Being Forced Into Bankruptcy
What is the single largest segment of society that is seeing the biggest increase in bankruptcy filings? You’ll probably be surprised to learn it is seniors.
Bankruptcy filing are up across the board. The housing market is the back bone of the American economy. With the bursting of the real estate bubble, every part of the economy has been dealt a crushing blow. Whether you call it a Small Depression or a Great Recession, nobody has avoided the pain being spread around.
Seniors have been particularly effected by the economic downturn. Why? The vast majority live on the economic edge. How so? The problem is found in their income. Most live on one form or another of fixed income. When that income drops a bit or costs go up, the numbers simply don’t work. Soon, more money is going out than is coming in and that is never going to work in the long run.
Seniors are also faced with a second major problem – medical costs. The health care in this country is a disgrace. Tens of millions simply don’t have coverage and seniors are faced with brutal cost problems. How are seniors on fixed retirement income supposed to deal with medical costs not covered by insurance or the government? They can’t. They simply end up filing bankruptcy in an effort to get rid of them. In many cases, they lose most of what they have accumulated to get through their golden years. It is a sad, sad situation.
So, how bad are things? Seniors now account for more than 23 percent of all bankruptcy filings. 23 percent! Data is not out for 2008, but many bankruptcy experts believe this number is much higher as bonds that make up much of the fixed income environment have dropped as the economy and financial markets have frozen up. Frankly, it is a disaster on all accounts.
What is the solution? Unfortunately, there isn’t one that is readily obvious. The concept of family is coming front and center again. The days of seniors living on their own are seemingly over. To save money and deal with medical costs, many seniors are moving back in with their kids. Look for this trend to continue in future years.