In our last blog, we examined the millennial generation and the debt that seems to be putting their financial futures into question. This week, we are taking a closer look at the baby boomer generation and what may be causing debt for this group as well as how bankruptcy may be of assistance at this stage of the game.
Who Are Baby Boomers?
The 76 million Americans born between 1946 and 1964 are known as baby boomers. Named after the dramatic increase in births following World War II, baby boomers are known for having a strong work ethic, advanced educations, and for being career-driven.
This generation has dominated the American landscape for decades, and are now readying for retirement (or have already retired). By all accounts, this generation should be blissfully living out their golden years relaxing and taking part in activities they enjoy. Unfortunately, for too many baby boomers, this is not the case.
Why Are Baby Boomers in Financial Trouble?
According to a recent study conducted by the Consumer Bankruptcy Project, baby boomers are going bankrupt at an increasingly alarming rate. People 65 and older are filing for bankruptcy at three times the average rate. There are several factors that are leading to this trend.
Shifting Retirement Incomes
The largest factor for many boomers is the shifting retirement income from government and employers to individuals. There has been a three-decade-long shift from pensions to 401(k) retirement plans.
During the 1980s and 1990s, Social Security benefits replaced about 40 percent of pre-retirement income for the average worker, the age for full benefits was 65. Now people of this generation are finding that the incomes they were counting on in retirement are not enough to make ends meet.
Increase in Medical Coverage
Another factor that seems to be financially harming boomers is the rising cost of healthcare. In the 1990s, Medicare covered most healthcare spending for the typical beneficiary. Out-of-pocket health costs were only 12 percent of income. Times have changed and so have medical premiums. Many seniors are finding that they must pay very high premiums and end up with medical debt despite having health insurance.
High Cost of Living
No matter how well baby boomers planned for their retirement, many did not anticipate the rise in the cost of living. Buying groceries, paying utilities, and paying off debts can be overwhelming for seniors.
Are you a senior who needs help finding a way out of debt? Whether your bills are medical or caused by credit card spending for daily necessities, we can help you look at how bankruptcy may help discharge some of those debts and put you on more solid financial footing. Talk to our team about what filing for bankruptcy would mean for you. Call the Law Office of Barry R. Levine today by phone at 978-922-8440, or visit our website at http://levinelawoffice.com.