Why are so many people over 55 going bankrupt? (moving, relative, retired)
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Because they don't manage their money. Because they insist on having children they can't afford to have and then foolishly mortgage their lives to put them all through college.
Most people I know retired at 55, as did I. We invested early and wisely, had no children and put away 35% of our monthly checks for 30 years. It's called discipline.
My parents passed in '94 and '98 without ever owning a Cell Phone, never having Internet, never having Cable TV. Those three items alone can add $300 per month to the typical retiree's current budget. $300/month that our parents never had to include in their retirement budgets. Add in poor planning for future Health Care Expenses and the puzzle is solved.
This retiree spends about $100/month for Google Fiber plus Ting plus Netflix. I just replaced my iPhone 5s, after 5.5 years, with an 8. Both were bought outright. I buy cars used, maintain them and drive them till they're no longer reliable. I had only one child and he didn't get taken to Disney World and/or on cruises every year. (He did, however, get a college degree with no student loans.) I don't carry a balance on my credit cards. Ever.
I'll admit that I was also blessed with marketable skills, a family that valued hard work and education and some luck (or the grace of God)- but it's also good decisions, too. "Social Security will be enough" is NOT a retirement plan. I've seen articles that you need $250K alone in savings to fund future medical, dental, etc. costs- premiums as well as co-pays. Most people don't even retire with that much.
The age groups in that study include only the Baby Boomers. Being a mid-cycle Baby Boomer myself, I feel our parents had a unique advantage for their retirement years - the proverbial three legged stool of Pension, Social Security, and Personal Savings. I also feel that too many of us Baby Boomers did not realize the financial security our parents had, falsely 'assumed' we would have the same security in our retirement years with no effort, and never did any active planning to ensure we would have financial security.
My parents passed in '94 and '98 without ever owning a Cell Phone, never having Internet, never having Cable TV. Those three items alone can add $300 per month to the typical retiree's current budget. $300/month that our parents never had to include in their retirement budgets. Add in poor planning for future Health Care Expenses and the puzzle is solved.
I think the people that had cell phones and internet back in 94 and 98 were mostly early adopters
I remember my first cell phone only came with 30 "free" minutes of talk time!
From the time I was married I never went one second without health insurance for the entire family and I will admit that at times paying the premium took a good bite of my wallet.
But with Medicare, and assuming some supplements, how does someone over 65 go bankrupt over medical bills?
The only ways to go bankrupt with medical bills at any age are:
1. having a health insurance policy with a cap (ie, the maximum coverage beyond which the insurance will not pay), or
2. getting medical care out of the insurance network.
The ways to go bankrupt with medical bills after 65 and on Medicare are:
1. not having a Medicare supplement with unlimited coverage (Medicare does have a cap), or
2. getting medical care from a place that does not accept Medicare (uncommon), or
3. going to a nursing home (covered by Medicare for 100 days only) - though this usually does not lead to bankruptcy but simply gradual exhaustion of all assets (after which one qualifies for Medicaid).
I am a 59 year old healthcare professional who knows a fair bit about medicine. The only major acute->chronic medical problem for which I would seek aggressive treatment is stroke. I will not do anything about heart disease or cancer should I get one and/or the other, except for palliative care and pain relief at the end. I have arrangements outside the US for an inexpensive nursing home should I need it. The only other expensive medical thing I could conceivably need would be acute management of trauma outside of my regular health insurance network (eg, being hit by a car), for which I have an annual travel insurance (I travel a lot). When I get on Medicare, I will purchase a supplement without cap. That is all I can think of on that subject...
I know everyone rang up their credit cards then declared bankruptcy before 2008 so we had a booming economy. but the laws have been changed and you can't do that so easy anymore . gw bush
I didn't see where the article stated people incurred the medical debt until after they were eligible for Medicare. At least some of it (medical and other) probably came before then.
It's not surprising (to me) that some people reach a point where bankruptcy becomes the logical option. As a younger working adult you have time to pay down debt, struggle thru the leaner years and hard times always believing the future is going to be better. As a senior your future is now. Given the choice between struggling to pay down debt until the day you die, or having it discharged via bankruptcy can look very attractive.
From the time I was married I never went one second without health insurance for the entire family and I will admit that at times paying the premium took a good bite of my wallet.
But with Medicare, and assuming some supplements, how does someone over 65 go bankrupt over medical bills?
Lack of planning. By 55 you should be pretty much debt free. House paid off or almost, no other debts that aren't paid monthly. If you don't plan, then losing your job at 55 will be a big hardship. Try and find a comparable job at that age when every company is downsizing older and more costly employees. If you are debt free you can get by with a job that is just a job, paying little but enough to pay monthly bills. When people get in the situation where they are living paycheck to paycheck and spending all or more life happens and you end up in trouble. Can't afford that phone service and cable package? Downgrade the phone service to a phone for just making and receiving calls and texts (Tracfone for instance) get rid of the tv portion of your package and go free tv over the internet and antenna. Reduce extraneous spending. Many people, however, fail in this and continue to spend and rack up debt so when they have an illness they can't pay because they failed to get insurance or proper supplemental insurance in a failed attempt to save on the wrong things. So basically, blaming it on medical costs is just an outcome, not the cause. The cause was lack of planning from earlier in their life. The so called donut hole should never bankrupt you if you planned accordingly. Don't go for the cheapest plan when you can't afford the risks. The amount of insurance you take is dependent on the risk you can afford not on what you want to spend on that insurance.
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