An increasing number of older adults of retirement age may be headed to bankruptcy court rather than a senior living community, suggests new research.
High healthcare costs and insufficient income are major factors due in part to a decreasing social safety net and changes in retirement plans, according to the investigators, who are from universities in Idaho, Indiana, Illinois and California. Representation of older adults among those in bankruptcy has never been higher, they said.
Comparing data from the Consumer Bankruptcy Project between 1991 and now, the researchers found more than a two-fold increase in the rate at which Americans aged 65 or more years filed for bankruptcy and an almost five-fold increase in the percentage of older Americans in the U.S. bankruptcy system.
“The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect,” they wrote. The trend will continue unless there are “significant policy changes that reassume the risks of aging and effectively [e]nsure the financial stability of older Americans,” the researchers said.