The Consumer Bankruptcy Project recently released its newest findings, and the results are scary. Since 1991, the rate of people 65 and older filing for bankruptcy has increased 200 – 300 percent. The reasons include declining wages, increased debt, and more out-of-pocket healthcare costs, among other things.
While you may not be able to protect yourself against every factor leading to bankruptcy in your twilight years, don’t panic just yet. There are certain things you can do to keep a handle on your finances.
Review retirement plan contributions
First, if you are fortunate enough to have a retirement plan, you’re off to a good start. But given the recent news, this is a good time to review your contributions. Are you putting enough away to retire comfortably? If you are 50 or older, you can play “catch up” by contributing even more than the normal limits.
Don’t ignore your medical debts
The reality is that, as most of us age, we need more trips to the doctor. Even with decent coverage, the costs can still pile up, so make sure that you stay on top of them.
Always check your medical bills for accuracy. A simple clerical error could cost you thousands. But if you just can’t pay the bill, contact your hospital’s billing department to discuss your options. They may offer you a more flexible repayment plan.
Add to your savings every month
It might be difficult to always contribute to your savings, but try to find a way. A healthy savings account can save you from racking up credit card debt or declaring bankruptcy in tough times.
And if you can’t add to your savings every month, try not to withdraw from it unless it’s absolutely necessary. Explore all other reductions in spending first.
Bankruptcy isn’t always a magic bullet for your debt
Not all debts are dischargeable in bankruptcy, and it may remain on your credit report for 10 years. Make sure you think carefully before going down this road. If you experience more medical costs or require extra care as you get older, you’ll need money to pay for it. Bankruptcy may be a short-term solution, but it damages your finances, especially in the long run.
Article provided by our partners at BALANCE