subject: Increasing Number of Bankruptcies Among Baby Boomers [print this page] Increasing Number of Bankruptcies Among Baby Boomers
Millions of baby boomers are expected to reach retirement age in the next ten years. Unfortunately, the number of baby boomers filing for bankruptcy is increasing every year. Researchers have been tracking the trend since the mid nineteen nineties. In the past few years alone, between a third and a half of all bankruptcies filed have belonged to people in the baby boomer age group.
No one takes the filing of bankruptcy lightly. But, the state of affairs is especially depressing for this group of consumers as they are either near retirement or already in retirement. So, instead of enjoying their retirement years taking pleasure vacations, they find themselves having to go back to work again to pay back debts they have racked up over the years.
There are a lot of groups being affected by the economy, however. So, why should this group be affected more than most other groups of consumers? There are a number of reasons, but three stand out. One is that many of the ones who did have savings had their investments in the stock market. Many of these have seen their net worth decrease significantly as they took continual losses.
Secondly, for the past several years the economy has been on a downtrend. Because of the bad economy, a lot of the baby boomers have been unexpectedly laid off in recent years. This has caused many of them to have to find other sources of income. Many that were not able to had to dip into their savings. And when the savings ran out, they found themselves racking up credit card debts.
The number three reason that many baby boomers are experiencing financial troubles is that real estate property has taken a significant hit over the last decade. Homeowners have seen their equity in their homes decrease. Some of the home investments have taken such a hit that they now have negative home equity.
If you are younger, you have an advantage in making extra income. People who are in younger age groups generally can make ends meet by obtaining other part time jobs to help them to bring in extra cash. Because of their age, baby boomers, as a group, find it harder to replace lost income. Primarily falling into the age group of 55 and older, they find it much harder to find employment than their younger counterparts. As a result, they find it harder to replace lost income and are driven to take out loans instead.
Long term unemployment also has another potentially devastating effect. Long periods of unemployment has also created a situation where many of them are without health insurance. And, catastrophic illnesses has drained what little resources many of them had. The combination of all of these factors can drain what financial resources that are available to them.
Unfortunately, no one has unlimited funds to draw on. And, having exhausted all other resources to get back into solvency, bankruptcy is probably the last refuge where people can turn to get debt relief. And, reluctantly, many baby boomers have begun to use that refuge.
