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Boomers and Bankruptcy
The New York Times reports that the signs of coming trouble were there. Vanishing pensions, soaring medical expenses and inadequate savings were building for years. The result is that the rate of seniors 65 and older declaring bankruptcy has tripled since 1991 and now make up a bigger share of all filers.
The cause, according to experts comes from a 30-year shift of a financial risk shift from government and employers to individuals who now burden a greater share of their financial well-being as government help shrinks.
The Times reports the transfer has come in the form of longer waits for social security benefits, the replacement of pensions from companies to personal 401(k)s and more spending on health care.
The paper based their reporting on a study by the Consumer Bankruptcy Project who explain that older people whose finances are precarious have few places to turn.
“When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give,” the study says, “and older Americans turn to what little is left of the social safety net — bankruptcy court.”
Deborah Thorne, an associate professor of sociology at the University of Idaho and an author of the study is quoted saying
“You can manage O.K. until there is a little stumble,” said “It doesn’t even take a big thing.”
The study says “bankruptcy can offer a fresh start for people who need one, but for older Americans it “is too little too late.” By the time they file, their wealth has vanished and they simply do not have enough years to get back on their feet.”
Ailsa Chang of NPR has an interview with Thorne, here.
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