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Bankruptcy filings booming for older Americans

Retirement for many people over the age of 65 is being met with something in greater numbers than that age group has ever experienced before. A growing number of new and longtime retirees are filing for bankruptcy.

New research shows that people 65 and older who are now filing for bankruptcy is three times higher than in 1991. Bankruptcy has become a consideration due to pensions vanishing, increasing medical costs and inadequate financial planning for retirement.

Other factors causing bankruptcy for older Americans include:

  • Waiting longer for social security benefits
  • Employer-provided pension being replaced with 401(k) savings plans
  • Carrying a mortgage into retirement
  • Providing financial assistance to children and grandchildren
  • Death or divorce of spouse
  • Declining incomes

When seniors begin to struggle financially they find very few places they can go for help. For older adults it is difficult enough to find one job, so taking on an extra job to pay for unexpected bills can be very tough. This growing number of people are finding bankruptcy as their way out.

Older Americans are not only seeking bankruptcy relief in greater numbers, people 65 and older represent 12.2 percent of all bankruptcy filers. The trend of filing for bankruptcy at an older age does not seem to have an end in sight. The group of people nearing retirement age are also filing for bankruptcy in greater numbers than ever before. In 2016, 66 percent more people aged 55 to 64 filed for bankruptcy than in 1991. For those 65 and older during the same time, the increase was 204 percent.

The study found these profound jumps in bankruptcy filings for older people show no signs of letting up. The problems that cause older people to turn to bankruptcy do not seem likely to go away soon. Financial difficulties during retirement years can often rob people of the fun and excitement they should be enjoying during that time. More retirees may be finding bankruptcy as a viable option to get their retired life back on track.

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