An increasing number of Americans over 65 years old are filing for bankruptcy. From 1991 to 2016, the number of Americans in that age group who filed for bankruptcy increased almost 500 percent.
Over 12 percent of all bankruptcy filers are now senior citizens, compared to the 2 percent of senior filers just 25 years ago. Researchers suggest a few possible reasons for the rapid increase in seniors filing for bankruptcy.
Increasing healthcare costs
More than 60 percent of seniors filing for bankruptcy report medical expenses as the reason for their debt. Additionally, around half of senior filers report having to miss work for medical reasons. This can lead to additional financial issues.
While Medicare covers many expenses for seniors, it does not cover everything. Seniors have a hard time finding coverage for hearing devices, eye exams, medical tests and other common procedures. Medicare also has copays and deductibles that are too expensive for many seniors, particularly those living on a fixed income. Seniors report almost 50 percent of their Social Security checks go to paying medical bills.
Decline in pensions
Pensions used to guarantee many seniors a set income for life after retirement. Nowadays, companies frequently offer employees 401(k) plans instead. These plans allow employees to decide how much of their income they want to invest for retirement. However, many people do not make enough money to save for retirement. Additionally, others might not be aware of how to invest their savings properly.
Longer life expectancy
People are living longer today. The average life expectancy in the 1970s was around 70 years old. Today, the average life expectancy is 78 years. As a result, people are paying for medical costs and other expenses much longer than in the past.
Once seniors realize their savings are running out, they often do not have the time or ability to get back on track. A recent study found the average debt for seniors filing for bankruptcy is over $100,000 dollars. As with the average life expectancy age, this number is expected to grow as well.
People of any age can face difficult financial circumstances. For many, bankruptcy can be the best debt relief solution. An experienced attorney can help you determine if bankruptcy is right for you.