Why are more seniors filing for bankruptcy?
Several factors are contributing to the need for an increasing number of baby boomers to seek debt relief via bankruptcy.
Florida has always been known as an attractive place to live for people after they retire yet today many of these people might be facing serious debt problems. According to CNBC, the average couple faces health care costs of $275,000 from age 65 on yet the likelihood of affording that care is a mere 50 percent. To make matters worse, those costs do not factor in long-term care needs.
Rising medical costs and senior bankruptcies
Fox Business recently reported that a Consumer Bankruptcy Project report found a dramatic rise in the number of bankruptcy cases filed by people 65 and older. Out-of-pocket medical costs are one of the contributing factors to this trend. It does not help that retired people face these rising costs when they have a reduced income after having left the workforce.
In 1991, the rate of bankruptcy filings among senior citizens was 2.1 percent. Today it is 12 percent. Some may believe this is a reflection on the large number of people in this demographic today as the baby boomers hit their retirement years but there are many other reasons that put these people at an increased risk of serious debt.
Multiple factors contribute to boomer debt needs
In addition to the rising cost of health care, Business Insurance notes that as more people’s pensions have been swapped for 401K accounts, they end up with less income in their retirement years when they might need more.
As medical care improves, so too does the average lifespan. This, in turn, can take a toll on people financially as the amount of money they have to live on during retirement needs to last longer.
Also a factor for today’s baby boomers is that many find their finances going to other family members instead of to themselves. From co-signing loans for their children to taking care of their own parents’ health and living needs, the current group of people over 65 often end up with less than enough money for their own needs.
More people in the over-65 group today still owe money on their mortgages than in past generations, contributing to yet another drain on this demographic’s already challenged financial status.
Legal consultation recommended
Seniors in Florida who are inundated with calls from debt collectors and mounting stacks of bills that they cannot pay should contact an attorney for help. This will provide them with the ability to review their situation and identify the right path for them.