Retirement is becoming an increasingly distant prospect for many senior citizens as more elderly Americans face bankruptcy. High medical expenses, a disappearing social security net and an increased cost of living are all contributing factors to the bankruptcy woes of America’s senior citizen population.
A study by the Consumer Bankruptcy project found Americans older than 65 are filing for bankruptcy at a rate three times higher than they were in 1991. The study’s researchers posit that this trend is due to a shift of financial responsibility from the government and corporations to the individual.
Americans are expected to contribute higher amounts into Social Security and wait longer for their 401(k) all while social safety nets such as Medicare offer less value. When these safety nets dry up, seniors are forced to turn to bankruptcy as the last form of safety.
Senior citizens also make up for a much larger number of Americans declaring bankruptcy. In 1991 they made up only 2.1 percent of American declaring bankruptcy, but now they account for over 12 percent.
The study pointed to further data to illuminate the disturbing trends fueling America’s senior citizen bankruptcy crisis. In 2013, Medicare beneficiaries over the age of 85 spent nearly three quarters of their Social Security income on out-of-pocket medical expenses. This points to a failure in both programs to provide the oldest and most vulnerable Americans with adequate financial and health aid.
And unfortunately, some Americans are caught in a cyclical trap that may result in long term financial burdens for generations to come. According to New York Times reporting, many older Americans co-signed student loans for their children and can no longer afford the debt payments. The child’s need for their parent’s non-existent money points to a potential growth in debt and bankruptcy in younger generations.
And furthermore, if the younger generations are unable to aid their needy elder family members due to high university tuition and stagnant wages, than the social security nets seniors depend on may continue to dry out.
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