Older Americans have a higher presence in the U.S. bankruptcy system than ever before, according to a new report.
The rate at which Americans ages 65 and older are filing for bankruptcy has increased two-fold since 2013, the study by the Consumer Bankruptcy Project found.
Meanwhile, there has been a nearly 500% increase in the number of older Americans in the bankruptcy system, the study – first reported by The New York Times – showed. While more than 12% of filers are now seniors, just 2.1% were in 1991.
The average senior files for bankruptcy more than $17,390 in the red.
While baby boomers are retiring in bulk, that isn’t enough to explain the dramatic rise in bankruptcies, the researchers concluded.
Increased financial risks, including inadequate income and rising health care costs, are among the factors filers listed as contributing to their socioeconomic struggles. When faced with unemployment or even bankruptcy, older Americans are also less likely to rebound than their younger peers.
Increased out-of-pocket spending on welfare programs, like Medicare, was also listed as a contributor, a problem that could be exacerbated in the coming years unless lawmakers take action.
This year, the total costs of Social Security will exceed total income for the first time since 1982, according to the annual Social Security and Medicare trustees report. The trustees forecast that 100% of benefits will be covered through 2034, after which the trust funds for Social Security, which also cover old age and disability insurance programs, will only be able to cover about 79% of benefits.
Meanwhile, Medicare’s hospital insurance trust fund is expected to run dry in 2026, three years earlier than what the trustees had predicted in last year’s report. At that time, funds will be sufficient to cover just 91% of Medicare Part A costs.
Overall, the number of senior households filing for bankruptcy is about 97,600, though the researchers expect that number to continue to rise. Even for those older Americans who are not filing for bankruptcy, the survey cited rising debt levels as a significant strain.
The average amount Americans ages 65 to 74 have stashed away for retirement is $358,400, which is less than those in the 55 to 64 age group, according to NerdWallet.