Sure, the economy is stronger than ever, and the real estate market is red-hot, but lifestyle may be forcing many older Americans to go bust, without additional revenue to support them.
This is appearing to be a growing problem. According to an article published by CNBC, “In the past decade, there’s been a steep increase in debt among households headed by someone age 75 and older.”
This is most likely one of the reasons why older Americans, grappling with mortgage and credit card debt, are resorting to such solutions as reverse mortgages.
This is based upon a study published this past August. The summary of the study states, “The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher.”*
The report also found “an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system.”*
The CNBC report stated, “In 2016, the average debt in families in which the head of the household is age 75 or older was $36,757. That is up from $30,288 in 2010, according to a recent report by the nonprofit Employee Benefit Research Institute in Washington.”
Still, the cost of living is continuing to rise, while monthly benefits for retired Americans has stagnated.
* Thorne, Deborah and Foohey, Pamela and Lawless, Robert M. and Porter, Katherine M., Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society (August 5, 2018). Available at SSRN: https://ssrn.com/abstract=3226574