It is rather a sad state of affairs that Los Angeles is one of the cities that has an increase in the number of bankruptcy filings from the citizens who are above 55 years of age. This number has only doubled since 1994. Despite the need to rest after years of employment, the country witnesses this stupendous rise of close to twenty percent of the total bankruptcy filings to be of the retirees. But professionals say that it isn\u2019t surprising \u2013 the failure of the individuals (close to 32%) in setting aside a retirement amount is the major contributing factor.<\/p>\n
The key reasons why seniors file for bankruptcy are medical expenses and credit card bills. Let\u2019s discuss this more:<\/p>\n
Medical Expenses:<\/strong><\/p>\n Here\u2019s a fact that may startle you!<\/p>\n In 2015, the Kaiser Family Foundation uncovered that approximately 1 million people have declared bankruptcy citing the piled up medical bills and expenses. This probably includes the majority of the Americans who have health coverage for the complete year and yet are unable to pay off their medical bills.<\/p>\n With age, the income sources decline but yet the medical expenses post-retirement will rise exponentially. The Employee Benefit Research Institute did a study in 2015 and the outcome mentions that a married couple would require $392,000 if they are on regular prescription drugs and that they are able to cover 90% of the related expenses post their retirements. Please note that the exorbitant amount is not accounting for long-term health care that is needed in old age. Many believe that Medicare will be their ultimate savior but it is quite unfortunate that there are exclusions in Medicare \u2013 eye care, dental care, and long term health care is not covered by Medicare. If you are looking at a semi-private room in a nursing home for long-term treatment, it costs about $225 per day and hence the high medical expenses that are needed to be borne by the individual. Besides, all high deductibles are to be paid by the seniors before the insurance starts for them.<\/p>\n Credit card Debts:<\/strong><\/p>\n High credit card debts are another major reason for the senior folks to file for bankruptcy. Most of the crowd would have accrued larger debts on their credit card prior to their retirement. Now that there is a decline in the income, they struggle and fall back on their payment schedules. Not just this, but there are very minimal savings for the retirement time of the seniors and they don\u2019t do a good job in planning well in advance for the same.<\/p>\n