Research shows that the debt levels of baby boomers have increased significantly in the past 20 years.
As boomers prepare for retirement, their debt forces some of them to continue working. According to the Federal Reserve Bank of New York, the total amount of debt for individuals in their 60s has increased by 471 percent over the past two decades. The combined outstanding balances carried by individuals in this demographic have reportedly reached $2.14 trillion.
Seeking medical treatments while carrying a heavy debt load
A health crisis can be an unbearable financial burden for people who are in debt for cars, homes and education. Health care and prescription costs have increased. Co-pays and out-of-pocket expenses keep going up. Many boomers find themselves falling behind on their bills after taking the time off from work to recover from surgery or a health setback.
Viewing retirement as a time of overwhelming debt
Without a meaningful increase in wages, older Americans may not have the financial means to support themselves in retirement and pay down their credit card bills. As reported by CNBC, researchers conducting a 2018 study found that one out of seven bankruptcy petitioners are over the age of 65. Each day, 10,000 baby boomers become old enough to begin collecting Social Security benefits, but many see themselves entering their retirement with a heavy debt burden.
Planning realistically for a future after bankruptcy
Boomers losing their jobs or coming to the realization that they no longer have the energy to continue working may face potentially devastating financial circumstances. Several myths portray bankruptcy as a pathway to “losing everything.” The real-world scenario, however, may be quite different.
An individual filing a personal bankruptcy petition may keep his or her primary home, car and some personal belongings. Examining ways to reduce burdensome financial worries through bankruptcy may help with planning for a positive retirement revolving around time spent with friends and family.