A recently published study from the American Bankruptcy Institute shows that filing rates for Americans over 45 are increasing larger than any other category of bankruptcy petitioners. With the fastest growing segment of filers coming in the over 55 category. “Facing reduced income in retirement and escalating health care costs, the researchers said they expect increasing bankruptcy filing rates for older Americans will persist into the forseeable future.”
A troublesome element of this news is that the research was only cited up until 2002 in this paper! Since 2002, debt levels have literally skyrocketed for all age groups. The data on the over 45 petitioners can only have grown much worse over the past 5 years.
In the good old days, people worked to pay off their homes by the time they were 45 to 50. In retirement they had no debt and some savings as well as employer pension plans they could rely on for guaranteed income. In recent years people have been trying to spend their way to prosperity rather than pay off thier debts. It turns out that having a line of credit is not nearly the same as having savings in the bank to draw on. The housing boom is now ended and the revolving line of equity withdrawal is tapped out. The sad part will be the overhang from the spending spree. Pain of the aftermath will be with our economies for some time to come. And with social benefits and health care systems already stretched beyond capacity, one must wonder how can these casulaties be rescued? The reality is that there will be no way to fix this for many people. The “golden years” are likely to be everything but.