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from the last-remaining-part-of-the-social-safety-net dept.
Personal bankruptcy among seniors has been growing over the last 25+ years, according to a recent study reported by the NY Times and syndicated nationally, for example at: https://www.seattletimes.com/nation-world/too-little-too-late-bankruptcy-booms-among-older-americans/
The signs of potential trouble — vanishing pensions, soaring medical expenses, inadequate savings — have been building for years. Now, new research sheds light on the scope of the problem: The rate of people 65 and older filing for bankruptcy is three times what it was in 1991, the study found, and the same group accounts for a far greater share of all filers.
Driving the surge, the study suggests, is a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being as the social safety net shrinks.
The transfer has come in the form of, among other things, longer waits for full Social Security benefits, the replacement of employer-provided pensions with 401(k) savings plans and more out-of-pocket spending on health care. Declining incomes, whether in retirement or leading up to it, compound the challenge.
Your AC's google-fu wasn't sufficient to locate the original report, but here is another quote from the Seattle Times link,
As the study, from the Consumer Bankruptcy Project, explains, older people whose finances are precarious have few places to turn. "When the costs of aging are offloaded onto a population that simply does not have access to adequate resources, something has to give," the study says, "and older Americans turn to what little is left of the social safety net — bankruptcy court."
"You can manage OK until there is a little stumble," said Deborah Thorne, an associate professor of sociology at the University of Idaho and an author of the study. "It doesn't even take a big thing."
To show that this isn't something new, here's an NPR report from 10 years ago, https://www.npr.org/templates/story/story.php?storyId=93241953
SEABROOK: So how does that play out for older Americans?
Prof. WARREN: Well let me put it this way. Back in 1991, older Americans, those over 55, were about eight percent of all the people filing for bankruptcy. Today, they're about 25 percent of those filing for bankruptcy. It's been a real shift in the demographics.
The median age and the population, generally, has increased by about three years. The median age in bankruptcy has increased in the same time period by about seven years.
Compare with the currently running story about wages and benefits climbing currently, https://soylentnews.org/article.pl?sid=18/08/05/016226
(Score: 2) by YeaWhatevs on Wednesday August 08 2018, @06:23AM (14 children)
Not enough $$$
(Score: 3, Insightful) by Anonymous Coward on Wednesday August 08 2018, @06:45AM (5 children)
Soo many boomers, what have you done with the so much money money they earned over their life-time?
Bankrupt companies do not pay pensions, right? What about the acquisition-then-shutdown mergers?
You tricked them in relying on your corporations and then let those corporations to silently discard the responsibility, haven't you?
You diluted their money with boom-bust and inflation cycles, then vacuumed the diluted solution into the coffers on the new corporations anyway, haven't you?
(Score: 2) by MichaelDavidCrawford on Wednesday August 08 2018, @10:35AM (1 child)
For the life of me I cannot fathom why organize labor always wants pensions that their employers pay. What if their employer isn't making enough money?
Live Picture went tits up in the late 90s, but some manner of caretaker in Delaware is still looking after my 401k.
Yes I Have No Bananas. [gofundme.com]
(Score: 3, Informative) by khallow on Wednesday August 08 2018, @12:04PM
It's a cheap promise by union leaders to keep union members happy. Not their problem two decades later when things stop working.
(Score: 0) by Anonymous Coward on Wednesday August 08 2018, @12:23PM
Silly boomers, should have invested in bitcoin.
(Score: 4, Insightful) by DeathMonkey on Wednesday August 08 2018, @06:04PM
And they will have absolutely no shame asking for a bailout for themselves after decrying the nanny-state for the last 50 years.
(Score: 2) by sjames on Thursday August 09 2018, @02:21PM
There's a lot to that. For some reason the courts failed to treat pensions as a hard obligation even though is was supposed to amount to deferred payroll. But of course, the courts put the banks at the front of the line for payment and the peons went to the back.
Surprise surprise, Wall Street and the financial sector are now reporting record profits and the boomers can't retire. And since the boomers can't retire, the generations that follow them are un/under-employed and can't even start building their own retirement.
(Score: 4, Insightful) by Anonymous Coward on Wednesday August 08 2018, @12:20PM (5 children)
I'm nearing retirement age (mid-60s). My parents (from Great Depression era) made it clear that living within my means was a good thing and I've taken that advice. While they had a few luxuries, they weren't conspicuous consumers. But many of my peers (boomers) didn't seem to get the same message. I wonder if part of the blame goes on schools (and curriculum designers) for not offering at least a little bit of financial education for those that didn't get it at home.
(Score: 5, Insightful) by RS3 on Wednesday August 08 2018, @01:21PM (3 children)
Interestingly, the cost of education, local public schools as well as colleges / universities, has risen far faster than averaged inflation, and those costs have drained much of the $ from the lower and middle-class boomers.
Yes, one of my standing complaints with the "education system" in US is that I did not have 1 day of teaching about finance nor economics in general. Had to learn all about the French Revolution, Russian Revolution, Boxer Rebellion, dangling participles and diphthongs, but nothing about money. Hmm... I wonder what that means...
(Score: 2, Informative) by Anonymous Coward on Wednesday August 08 2018, @02:23PM (2 children)
Direct consequence of cheap credit and federally backed loans leading to price inflation. [investors.com]
(Score: 3, Interesting) by RS3 on Wednesday August 08 2018, @09:39PM (1 child)
Absolutely. Money-supply economics is a thing, and not considered enough. People are amazingly opportunistic and find where money is and dip into that stream. My bigger gripe is with the public school system spending money however they like and raising taxes every year. Who is representing us, the taxpayer? Okay, I hear people moaning about underpaid teachers, and it is very true in some places. But in my area, teachers are some of the highest paid in the US. I know many, some well, and they have much easier jobs than I ever have, summers off, lots of holidays and other days off. Sorry- I know them, and they admit it's easy work for reasonable pay. What bugs me is the money is too easy for the school administrators to come by.
(Score: 1, Interesting) by Anonymous Coward on Wednesday August 08 2018, @11:28PM
Regularly work with uni tech staff - almost twice the salary of an engineer in the private sector and take twice as long to complete a task.
Yes, that too! The number of administrators increased, [theatlantic.com] adjunct teaching staff increased while tenured professors decreased. How is it even possible to need more administrative staff when we have ever more powerful computers?
(Score: 1) by kramulous on Thursday August 09 2018, @02:30AM
While I do enjoy a little boomer bashing from time to time, I don't actually blame them, or any other generation, for their consumer behaviours.
There are so many very powerful psychological techniques that are being employed to sell us anything and everything that you need to be an outlier to be able to ignore them. The baby boomers were just the first generation that felt these effects.
(Score: 2) by JoeMerchant on Wednesday August 08 2018, @06:22PM
When the president sets the precedent, you'd expect his followers to follow suit.
🌻🌻 [google.com]
(Score: 2, Interesting) by Anonymous Coward on Wednesday August 08 2018, @09:42PM
Every option suffers from the same fatal flaw. Pensions, 401K, welfare like social security... all are, in some sense, the same: today's old people must be cared for by today's young people.
None of that can work reliably. When a surge of working people unbalances the system by supplying value, the costs of investments go up and the cost of labor goes down. When they become old, they all want to sell of their investments at the same time, and thus the value plunges. Meanwhile, there are few workers, so the cost of labor goes up.
The government can't really get around this. Mandating that labor stay cheap will just cause shortages. They could force people to work as slaves, but then the worker shortage causes labor costs to rise elsewhere in the economy. Mandating that the investments supply great value will just screw up the currency with hyperinflation.
Fundamentally, it is impossible to have investment success for a group like the baby boomers. This includes pseudo-investment things like social security. The money entered into the system doesn't really exist. Even if it were physically hoarded as piles of case, it wouldn't really exist because releasing the stores of cash would cause inflation. There just aren't enough workers.
You can't even import suitable workers. We get people who hate our culture, refuse to speak our language, and want our elderly to hurry up and die. These people are relatively unproductive and will themselves need care when they get old.
Robots? Oh, maybe... and Japan is trying it. Old people tend to want human contact. Robots are not anywhere near capable enough.