Bankruptcy is on the rise in the United States, and older Americans are being disproportionately affected by the debt crisis. The precipitating factors for the increase should come as no surprise to anyone: pensions are vanishing, savings are non-existent, and medical expenses are overtaxing the pocketbooks of all but the wealthiest citizens.
A new study from the Consumer Bankruptcy Project reveals just how bleak the financial picture for older Americans really is. The rate of people age 65 or older are filing for bankruptcy three times more than the rate the same demographic filed at in 1991. To explain the situation using hard numbers, there were 1.2 bankruptcy filers per 1,000 people age 65-74 in 1991. Between February 2013 and November 2016, there were 3.6.
But what does this surge in bankruptcy among older Americans really come down to? The fact that our social safety net is falling apart at every seam. Financial risk has shifted from the government and employees to individuals. Wait times for Social Security benefits have increased exponentially. Employer-provided pensions have been replaced by 401(k) retirement savings plans. And average workers bear more and more out-of-pocket responsibility for medical care than ever before.
The study summarizes: “When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give, and older Americans turn to what little is left of the social safety net—bankruptcy court.”