Even as bankruptcy filings are decreasing across the country, a new surge in filings may be just around the corner here in New Jersey. As baby boomers reach retirement age without sufficient funds to support themselves, filing for bankruptcy may become necessary.
With many boomers still upside down in their mortgages and mired in credit card debt, they may be inclined, or even required, to stay in the workforce as long as they can to keep their heads above water. Some boomers still even carry student loan debt, which is generally not dischargeable in bankruptcy. As this generation reaches the traditional retirement age, which continues to go up, they may even be liable for student loans taken out for their children.
In addition, as boomers age, they will likely incur more medical bills due to the effects of aging. Medical expenses are a major contributor to the type of debt load that can eventually lead to the decision to file for bankruptcy.
Past generations were able to look to the government to supplement their retirement through Social Security, but that option is barely relevant now; the average monthly Social Security income is now less than $1,300.
Statistics from a January 2014 Gallup Poll show that almost half of those boomers surveyed expected to work until at least age 66. On top of that, 10 percent of boomers say that they may never be able to retire. Of course with today’s unemployment rates, that assumes that they will still have the option to work.
Many of these factors add up to financial challenges for Americans as they reach retirement age. Bankruptcy in New Jersey and across the country may be the best option for boomers who find themselves so hopelessly in debt that they may never be able to climb out of it, no matter how long they work. As retirement age nears, it may be wise for some people to consult an experienced bankruptcy attorney to help evaluate their debt relief options.
Source: Indiana Gazette, “ Average retirement age creeping ever higher,” Abby Ellin, Feb. 2, 2014