When financial markets practically collapsed in 2007, no one really knew what to expect in future years. One group that has been going crazy over the economy and the way the government responds to the recession are the baby boomers. No wonder this group is increasing at an alarming rate with more than 10,000 reaching the age of 65 every day. I think 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 run a $ 134 trillion deficit over the next 75 years. What’s scary is that Americans as a whole no longer have a savings account and are counting on that money for their retirement. In fact, 50% of all American workers have less than $ 10,000 in some type of retirement account. Over the past 10 years, I have heard many people say 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 homes due to foreclosure. Too much to plan for using your home equity for retirement. Due to the economy, many baby boomers had to come out of retirement to avoid filing for bankruptcy and to continue living.
When Social Security started, a person could retire at age 62 and receive benefits. Back then, people only lived to a ripe old age of 67. This left the Social Security system in jeopardy for paying only a few years of benefits to that person even though that person paid their entire life. Now the average American lives to age 77 and SSI begins at age 65. In accordance with this, the system simply became responsible twice. In the grand scheme of things, the program could have worked if the money had been set aside and invested as it was supposed to have been. Instead, the money has been deposited into the general fund to be used as Congress sees fit. It doesn’t take a rocket scientist to figure out that this won’t be there anytime soon because money doesn’t exist. The sad thing is that many older people count on this every month and without it they would have to file for bankruptcy and possibly end up on the streets. Baby boomers need to wake up and smell the coffee and, if necessary, file bankruptcy to eliminate their debt and lower their overall cost of living.
Here are some scary facts that should wake up the baby boomer generation.
- A recent survey found that in the 46-64 age group, 26% of these people have no savings at all. In another survey that showed 46% of them have less than $ 10,000 reserved 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 seniors in the US, and over the next 30 years that number is expected to double. Of these, one in six lives below the poverty line.
- To avoid filing for bankruptcy, many older people have to continue working into their retirement years. In 1985, the number of older people still working between the ages of 65 and 69 was only 18%. In 2010, that number increased to 32%.
- Seniors filing bankruptcy has increased 178% for ages 65 to 74 between the years 1991 and 2007. With a rising cost of living and only Social Security, it’s no wonder file for bankruptcy.
- Although cost of living is a factor, the number one cause of seniors filing for bankruptcy is medical bills. In fact, medical bills played a large role in 60% of all people who filed for bankruptcy in the US Of all medical bill bankruptcy applications, 75% of people had health insurance.
I could go on and on about the economy and the US and how it will affect baby boomers who are preparing to retire. People really need to take a serious look at their finances and even consider filing for Chapter 7 bankruptcy if necessary. Going into retirement with debt and relying on Social Security to survive will only end in disaster. It would be much better to eliminate these debts before having to depend 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.