Wait… What?
The economy is booming, but not for all, and it appears that for some, a “golden age” of retirement is a thing of the past.
More older Americans are filing for bankruptcy than ever before, according to new research.
Study findings, published in the report Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society, were based on data collected through the Consumer Bankruptcy Project (CBP).
What Ages?
Focusing on older Americans, researchers discovered the number of bankruptcy filers ages 65 to 74 doubled between 1991 and 2016, while the number of filers 75 and up tripled.
Moreover, results showed “an almost five-fold increase in the percentage of older persons [ages 65 and over] in the U.S. bankruptcy system,” the report noted.
While it’s true the older population is growing in general as Boomers enter retirement age, researchers were sure to point out that it “can explain only a small portion of the effect.”
“In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of health care, as they try to deal with reductions to their social safety net,” according to the report.
Negative Wealth?
As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers, it finds.
“For much of the United States’ history, older Americans were viewed with contempt and treated as outcasts,” the authors write. “By the early twentieth century, attitudes toward older Americans shifted and the risks of aging diminished. Rather than discarding them, Americans began to accept elderly’s welfare as their collective responsibility. The social safety net for seniors evolved to include Social Security, Medicare, Medicaid, and defined-benefit pension programs. Consequently, aging became less of a high-risk proposition.”
However, that “risk” is once again increasing, and older Americans’ reasons for filing strongly suggest they are experiencing the fallout from our current individualized risk society and the corresponding shrinkage of their social safety net.
Jessa Claeys is a writer, editor and graphic designer.