Retired and Bankrupt

As the great recession drags on it’s clear that the average American’s dream of retirement may be just that…a dream. Far from the fiscal hawks’ mythology of “greedy geezers”  living high on the government hog or cow,  or whatever farm analogy you prefer, it’s clear that a growing number of seniors are facing frightening fiscal futures. There have been a number of stories recently highlighting the realities facing today’s retirees. USA Today wrote:

The ranks of older bankruptcy filers also have been swelling rapidly. From 1991 to 2007, bankruptcy filings by those 65 and older increased by 150%, while filings in the 75-to-84 age group soared 433%, according to the Consumer Bankruptcy Project. Older Americans are staggering under debt because of a variety of problems — from unexpected job losses late in life and underemployment to overwhelming medical bills and providing financial help to their children and grandchildren, analysts say. Making the issue even more serious: They have little time to climb out of debt, says Matthew Beatman, bankruptcy lawyer at Zeisler & Zeisler in Bridgeport, Conn.

A University of Michigan Law School study examined why Americans over 65 are the fastest growing demographic of bankruptcy filers and reports that seniors blame credit card debt.

And though older bankruptcy filers blame credit cards for their debt, they're not the underlying cause of their problems. Much of the credit card debt resulted from attempts to supplement lost income. "When people in their 50s are laid off after they have been at the same company for 25 to 30 years, they find things have changed," says Brian Grogg, a credit counselor at GreenPath Debt Solution in Farmington Hills, Mich. "They need to know more about computers. They find it harder to get a job."  And seniors who rely on Social Security are finding it insufficient. There will be no increase in retirement benefits  in 2011 for the second year in a row. -- USA Today

As we’ve reported here before, we can not afford to ignore the growing Retirement Income Deficit facing millions of Americans. Yet, that’s exactly what’s happening  in Washington in the rush to balance the federal books on the backs of programs like Social Security and Medicare.