The idea of a peaceful retirement in which people stop working and live out their remaining years peacefully is no longer a reality for many. Dwindling incomes and soaring health care costs are creating a financial storm for Americans over the age of 65. Now, bankruptcy because of medical debt is sadly not that uncommon for this group.
A couple decades ago, retirees in South Carolina could expect to live comfortably on pensions, Social Security and maybe a bit of savings. As pensions have largely fallen out of favor and businesses heap the burden of saving for retirement onto workers, fewer people are financially prepared for this period of life. The biggest financial strain according to one expert? Just the costs associated with getting older.
Although Medicare helps seniors cover some health care costs, many patients still have to shell out for co-pays and deductibles. This insurance does not cover everything, either. Eye exams, hearing aids, certain dental treatments and long-term care — all of which people usually end up needing — are not covered. The Kaiser Family Foundation reported that out-of-pocket health care costs for the average person on Medicare accounted for 41 percent of the typical Social Security income that year. By 2030, costs are expected to rise to half of the average person’s Social Security income.
It is perhaps no surprise that medical debt is one of the reasons that bankruptcy filings by seniors have more than doubled over the last quarter century. However, people in South Carolina over the age of 65 are not the only ones who are struggling. The costs of health care can be astronomical regardless of insurance coverage or wealth, and it is easy to suddenly discover that paying back bills is not possible. For most people, bankruptcy provides a proven path toward debt relief, which can help them secure a better financial position in the future.