Chasing the Old-Age Rainbow

Economy Forcing More Elderly into Bankruptcy

For many aging seniors, the hope of finding a carefree and financially secure retirement is disappearing faster than the proverbial rainbow. Statistics reveal the true extent of the problem: Americans age 65 and over are filing for bankruptcy at a faster rate than any other age group.

"There are multiple reasons for this shift. Rising costs across the board are the issue for the most part. Seniors are living on fixed incomes, they cannot keep pace or absorb all these increases," says R. Scott Bell, a bankruptcy law attorney in Bakersfield, California.

These facts help to outline the state of financial fragility facing many older Americans:

• Two thirds of all seniors over age 65 rely upon Social Security for half of their total income.
  
• Fully 40% of all Medicare beneficiaries have less than $12,000 in countable assets including pension funds, cash savings, the surrender value of life insurance policies, stocks, or other types of investment funds.
  
• Approximately 70% of seniors have annual incomes of less than $50,000 and of these, about one in five is spending more than 40% of their income on debt, including payment on mortgage debt.

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