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posted by martyb on Wednesday August 08 2018, @06:14AM   Printer-friendly
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

 


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  • (Score: 2, Insightful) by khallow on Wednesday August 08 2018, @06:50AM (7 children)

    by khallow (3766) Subscriber Badge on Wednesday August 08 2018, @06:50AM (#718685) Journal

    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.

    OTOH, where was all the money for those schemes going to come from? Most of the items mentioned involve transfers of wealth from the young to the elderly and involved substantial cost growth that had to be contained in order for the schemes to survive into the future. Well, the young are in poor straits right now and not as numerous as they used to be. So that wealth transfer just isn't going to happen smoothly like it did with past generations which had a higher young to old ratio.

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  • (Score: 0) by Anonymous Coward on Wednesday August 08 2018, @07:07AM (2 children)

    by Anonymous Coward on Wednesday August 08 2018, @07:07AM (#718691)

    Most of the items mentioned involve transfers of wealth from the young to the elderly and involved substantial cost growth that had to be contained in order for the schemes to survive into the future.

    Was it by incompetence or by malice?
    On one side they knew the "efficiency" will go up (thus the total wages will go down) - that is one of the tenets of capitalism; on the other side they were happy to promise the youngsters will help them at retirement through a scheme that involved parting the "protected" by their money first.

    • (Score: 1) by khallow on Wednesday August 08 2018, @11:53AM (1 child)

      by khallow (3766) Subscriber Badge on Wednesday August 08 2018, @11:53AM (#718738) Journal

      On one side they knew the "efficiency" will go up (thus the total wages will go down)

      "They" didn't know that because that isn't true. The more efficiently we use labor, the more valuable and in demand it becomes. That's how it's working in the developing world in places like China.

      that is one of the tenets of capitalism

      That is a tenet of Marxism which is an anti-capitalist creed. Capitalism typically believes in positive sum game when it comes to employment. Such a blatant misattribution is very Orwellian.

      on the other side they were happy to promise the youngsters will help them at retirement through a scheme that involved parting the "protected" by their money first.

      Social welfare schemes have nothing to do with capitalism aside from them being more affordable in capitalist systems.

      • (Score: 0) by Anonymous Coward on Wednesday August 08 2018, @01:00PM

        by Anonymous Coward on Wednesday August 08 2018, @01:00PM (#718756)

        Social welfare schemes have nothing to do with capitalism aside from them being more affordable in capitalist systems.

        The "cheap thing you get from the Pound shops, don't be angry when they don't work" type of affordable?

  • (Score: 1, Informative) by Anonymous Coward on Wednesday August 08 2018, @04:13PM (3 children)

    by Anonymous Coward on Wednesday August 08 2018, @04:13PM (#718833)

    > OTOH, where was all the money for those schemes going to come from?

    An easy target would be the "defense" budget. If it was actually a defense budget instead of an offense budget, and had just a bit less pork for military contractors, then there would be plenty to make up the small shortfall in US Social Security due to the boomers all retiring at once.

    • (Score: 0) by Anonymous Coward on Wednesday August 08 2018, @05:05PM (2 children)

      by Anonymous Coward on Wednesday August 08 2018, @05:05PM (#718859)

      Um... I hope you realize that Social Security and Medicare/Medicaid make up 50% of the federal budget, and the defense budget is 16%. It could sort-of cover SS, because that's not completely out of whack yet, but it can't cover both SS and Medicare, especially if you ignore the dodgy accounting the government allows itself to use but would hammer a corporation for using.

      • (Score: 1, Insightful) by Anonymous Coward on Wednesday August 08 2018, @06:00PM

        by Anonymous Coward on Wednesday August 08 2018, @06:00PM (#718886)

        Looks like we might agree that health care (Medicare on the federal side) is out of control which is why I wrote SS specifically.

        Is SN due for another debate on how to rein in US health care costs and get them more in line with other countries? A few years ago I read a book called Health Care USA which is an overview of all the different parts of the health system, from patients thru MDs, pharma, insurance and the State/Feds, as well as all the people that work in the system in non-medical capacities. While the book is aimed at students getting into the system (in nearly any capacity) and may be a required text for an intro course, it gives a good view of the whole sector "from orbit". Looks to me like just about everyone involved shares the blame, even patients if they don't research and follow up on spurious charges.

      • (Score: 3, Informative) by FatPhil on Thursday August 09 2018, @01:19AM

        by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Thursday August 09 2018, @01:19AM (#719172) Homepage
        You're right, but that's because the healthcare scam you have in the US is just pork for the insurance arm of the big-finance cabal. Trimming the pork should be the goal.
        --
        Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves