A recent report by the Employee Benefits Research Institute indicates that more Americans than ever are spending their retirement in poverty.
Los Angeles Chapter 7 Bankruptcy Lawyer Vincent Howard understands that the poverty rate for those between the ages of 65 and 74 living below the poverty line jumped from 7.9 percent back in 2005, before the recession, to 9.4 percent in 2009, in the midst of it.
The numbers got worse as the retirees got older. For those between the ages of 75 and 84, the poverty rate climbed from 7.6 percent in 2005 to 10.7 percent in 2009. And then there was the rate for those 85 and older. For them, the poverty rate in 2009 was nearly 15 percent.
We're not talking about individuals who were already poor before they aged and simply carried that with them. Of the 85-and-older group, six percent had not been below the poverty line prior to 2005.
While older adults were hit by the housing crisis, just like everyone else, what's become the driving force behind this poverty increase are health ailments and the medical costs associated with those. In fact, 70 percent of those older adults living in poverty have suffered some serious medical condition. Those would include lung disease, stroke, heart problems or cancer. For those above the poverty line, the rate of such ailments stood at just below 50 percent.
Now to some extent, people expect that medical costs will rise as they age. In fact, medical expenses were the second-highest expenditure for those over the age of 75, behind home expenses, which include mortgage or rent, utilities, repairs, taxes and insurance. But that shouldn't have retirees choosing between food and getting necessary medical treatment. Sadly, though, many people find themselves mired in a vicious cycle of debt, for which they see little recourse.
For widowers, single people, African Americans and those with limited education, the problem is much more pronounced, the study found.
The good news is there is help, in the form of a bankruptcy. Most older adults, in general, are extremely hesitant about this option because they fear some stigma or the inability to restore their finances and credit.
The fact of the matter is, the stigma associated with bankruptcy has largely dissipated, due to the fact that so many people have chosen to seek this form of relief in recent years.
Additionally, just because you are older doesn't mean your credit can't be restored. True, it may never be exactly where you had hoped it would be. But the reality is if you're contemplating bankruptcy, your credit probably isn't great right now anyway. You have to consider the alternative to not filing, which is to live out the rest of your Golden Years stuck in a debt swamp.