Will Baby Boomers Have To File Bankruptcy in This Economy?

When the financial markets virtually collapsed back in 2007 no one really knew what to expect in the future years. One group that has been freaking out about the economy and how the government responds to the downturn is the baby boomers. Rightfully so, this group is increasing at an alarming rate with more than 10,000 reaching the age of 65 every single day. I believe this is why the federal government is starting to get very nervous about the Social Security system. In a recent report, Social Security is expected to have $134 trillion shortfall over the next 75 years. What's frightening is that Americans as a whole no longer have a savings account and count on that money to be there for their retirement. In fact, 50% of all American workers have less than $10,000 in some sort of retirement account. Over the last 10 years I heard many individuals saying that their retirement was the equity in their home. For many the last few years destroyed all of their equity even pushing many of these people out of their houses by foreclosure. So much for planning on using your home equity for your retirement. Because of the economy, many baby boomers had to come out of retirement to avoid filing bankruptcy and just be able to continue living. When Social Security was started a person could retire at 62 years old and receive benefits. Back then, people only lived to a ripe old age of 67 years old. This left the Social Security system on the hook for paying only a few years of benefits to that individual even though that person paid in their entire life. Now, the average American is living to 77 years old and SSI starts at 65 years old. According to this the system just became liable for twice as much. In the big scheme of things the program could've worked if the money was set aside and invested like it was supposed to have been. Instead, the money has sat in the general fund to be used as Congress saw fit. It doesn't take a rocket scientist to figure out that this will not be there in the near future because the money does not exist. The sad thing is many seniors count on this coming in every month and without it they would have to file bankruptcy and possibly end up out on the street. Baby boomers need to wake up and smell the coffee and if necessary file bankruptcy to eliminate their debt to lower their overall cost of living. Here are some scary facts that should wake up the baby boomer generation. In a recent survey it was found out in the age group of 46 to 64, 26% of these individuals have no savings at all. In another poll that showed 46% of them have less than $10,000 set aside for retirement. According to the Employee Benefit Research Institute, 60% of all American workers said the total value of their savings and investments is less than $25,000. Currently, there are more than 40 million senior citizens in the US and over the next 30 years that number is expected to double. Out of those, one in every six lives below the poverty line. To avoid filing bankruptcy many seniors are having to continue working in their retirement years. Back in 1985 the number of seniors still working between 65 to 69 years old was only 18%. In 2010, that number increased to 32%. Seniors filing bankruptcy has increased by 178% for the ages of 65 to 74-year-olds between the years of 1991 and 2007. With a cost-of-living increasing and only having Social Security to rely on it's no wonder so many are having to file bankruptcy. Although the cost of living is a factor, the main cause of bankruptcy filing among the elderly is medical bills. In fact, medical bills played a major role in 60% of all individuals filing bankruptcy in the US. Of all of the medical bill bankruptcy filings, 75% of the people had health insurance. You could just keep going on and on about the economy and the US and how it will affect baby boomers that are preparing to retire. People really need to take a serious look at their finances and even consider filing Chapter 7 bankruptcy if necessary. Going into retirement being in debt and relying on Social Security to survive will only end up in disaster. It would be much better to eliminate these debts before having to rely on a fixed income. In a perfect world it would be much better to be debt free when you retire and not carry the burdens in your later years.