Boomers going bankrupt at unprecedented rate

The social media teaser for a recent New York Times article paints a grim portrait of the economic prospects for aging Baby Boomers: “Vanishing pensions. Soaring medical expenses. Inadequate savings. The rate of older Americans filing for bankruptcy has tripled since 1991.” A study by the Consumer Bankruptcy Project shows that, for people aged 65 to 74, annual bankruptcy filings have increased from 1.2 per 1,000 people in 1991 to 3.6 in recent years.

“There is no question that more and more seniors are facing financial hardships,” said Libertarian National Committee Chair Nicholas Sarwark. “The New York Times story and the Consumer Bankruptcy Project study that inspired it both fail to mention the three causes of bankruptcy cited in the story’s headline: vanishing pensions, inadequate savings, and soaring medical expenses. These are all problems caused largely by government policy.”

Pension funds require a relatively predictable and fair return to be actuarially sound. Likewise, savers need that same adequate and fair return to make saving worthwhile, so vanishing pensions and inadequate savings are two sides of the same coin.

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