Bankruptcy is a painful process at any point in life, but it’s especially excruciating when you are at or near retirement age. There’s no time to recover and build retirement income.
Unfortunately, seniors are declaring bankruptcy at an increasing rate. A recent study from the Consumer Bankruptcy Project found that the rate of Americans at or above age 65 declaring bankruptcy had increased by over 200% from 1991 to 2016. Because of the higher percentage of older Americans in the population, that translates to a nearly five-fold increase in seniors in the bankruptcy system.
The contrast is sharp among age groups over the same timeframe. The bankruptcy rate fell by 78% among Americans ages 18 to 24, by 64% in the 25 to 34 age group, and by 40% in the 35 to 44 age group. Meanwhile, bankruptcies rose by 66% in the pre-retirement group (ages 55 to 64).