Ed O'Gorman More Older Americans Declaring Bankruptcy - CBS 21 News
More Older Americans Are Declaring Bankruptcy
by Joseph Ducey
A recent study is raising the alarm about the number of older Americans who are declaring bankruptcy.
The study done by the Consumer Bankruptcy Project finds a two-fold increase in the rate of Americans, who are 65 and over, filling for bankruptcy and an almost five-fold increase in the percentage of seniors in the U.S. bankruptcy system
Investment officers with River Wealth Advisers say one of the biggest changes over the past 25 years has been cuts or elimination of pensions, which have been replaced primarily by plans like 401k's and 403b's.
They say this change shifts the burden to the individual to save up money over a number of years, as opposed to an employer essentially guaranteeing a set amount of income in retirement.
“In addition to saving, it’s also going into this retirement phase with as manageable a debt load as you possibly can have. A big mortgage payment can be very hard to overcome when you’re on a limited income and something unexpected happens," said Edward B. O'Gorman, Chief Investment Officer at River Wealth Advisers.
O’Gorman says other factors playing in to the rise in seniors filing for bankruptcy include the rising cost of healthcare, increased out of pocket payments, and inflation.
"One of the challenges with social security in particular is that the rate of inflation that's applied to social security payments, you do get a raise periodically as costs go up, really isn't consistent with the rate of inflation that retirees experience,” O’Gorman said.