This is a concerning trend.
Older Americans are filing for bankruptcy at more than double the rate of just 25 years ago, a sign of a “coming storm of broke elderly,” a new study finds.
The rate of people 65 and over filing for bankruptcy grew nearly 204 percent from 1991 to 2016, a study published by the Social Science Research Network found, and the percentage of seniors among all U.S. bankruptcy filers increased by nearly five times over the same period.
Researchers looking at data from the Consumer Bankruptcy Project found that high health care costs, combined with reduced incomes and the widespread decline of pensions, are all contributing to the growing trend of “financially broken retirees.”
Deborah Thorne, one of the study’s authors from the University of Idaho, said “it’s not an individual’s fault” when they have to file for bankruptcy, citing issues with retirement systems and Medicare.
Wait… what? “”it’s not an individual’s fault” when they have to file for bankruptcy”??? Whose fault is it, then? Part of the problem is that people aren’t taking responsibility for their own financial affairs. They behave as if magic pixies flew into their bank accounts and spent all of their money. Except in rare circumstances, almost every bankruptcy is an individual’s fault. Let’s think about this for a minute.
For years, we have seen Americans saving way too little.
Northwestern Mutual’s 2018 Planning & Progress Study, which surveyed 2,003 adults, found that 21 percent of Americans have nothing saved at all for their golden years, and a third of Americans have less than $5,000. To put that into perspective, it means that 31 percent of U.S. adults could last only a few months on their savings if they had to retire tomorrow.
Young people who haven’t had as much time to save aren’t skewing the statistics, either. The report found that 33 percent of boomers have $25,000 or less in retirement savings.
1) Medical expenses2) Job loss3) Poor/Excessive use of credit4) Divorce/separation5) Unexpected expenses
There are rare circumstances where an individual could be said to not be at fault for their financial condition. A major economic depression or natural disaster, for example. A lengthy, expensive medical issue, for example. But if an unexpected $5,000 bill pushes you into bankruptcy, it’s your fault. You planned poorly.
Our culture increasingly seeks to absolve individuals of any responsibility for the choices they make (see: abortion). But while the final incident that pushes someone into bankruptcy may not be their fault, the fact they were so vulnerable to bankruptcy is usually the result of a thousand bad decisions made up to that point.