‘Too Little Too Late’: Bankruptcy Booms Among Older Americans

[Ridgerunner]

Not big enough. It’s a service, part of which requires state licensure. How does that saying go? “We eat what we kill.” Actually, we could easily sell that licensed part, but none of us wants to.

 

[Augustinian]

Payroll is one of the reasons companies borrow money, even profitable ones.

Paying on time is something that employers are really expected to do without fail, and its a policy that makes sense to keep the loyalty of the staff.

Having a line of credit available if there is a problem with having the money on the day its needed would seem pretty prudent.

 

[PetraG]

I think there should be government assistance for these folks - tax cuts are not going to do much to help them. We have to ask what kind of country we are. What do we do with these people, seriously, as a society?

If they’re declaring bankruptcy, they’re defaulting on debt. They are not the only ones with the problem. Someone else is being left holding that bag, too.

The problem is that bankruptcy can come for a variety of reasons. It can come from working a job that only paid enough to get by and offers no pension. It can come to those who had a sufficient income but failed to provide for their own retirements because they lived above their means in spite of the ability to save if they had disciplined themselves. Finally, and very sadly, it also happens because retirement nest eggs are the target of thieves, scam artists, and greedy friends, relatives and caretakers who commit financial elder abuse.

Unfortunately, because of the magnitude of poor preparation for retirement, I think the best the government will be able to do for bankrupt seniors is health care and a minimal stipend. For those who haven’t literally gone bankrupt but who need to lower their costs, there are states and communities suffering from job scarcity that will be able to offer relatively low cost real estate and cost of living. Not being able to live where you’d like to live during retirement is hardly the same as not being able to live. The government may need to increase spending on health care services in under-served areas that are otherwise attractive to retirees. There could be a “win-win” in that.

 

[PetraG]

There is a detestable practice in the public school system in our state (Illinois) where teachers receive huge raises during their last year of teaching, because their pension is based on their last-year salary.

The teachers in our state have a very strong union. There are very few teachers who even think about, let alone try, to reign their union in. They have no choice but to go along with it…

Oregon has a public retirement pension crisis partly because the state “struck a deal” in which the wages at the time were frozen or cut but the unions got a super sweet-heart retirement package. Well, now the can that was kicked down the road is at our feet. It isn’t the unions that were to blame, in my opinion. The state needed to have cut services, not increase future commitments beyond all ability to pay. Serious pain is coming. What remains to be seen is how it is to be doled out.

 

[kill051]

Lastly, or maybe firstly, old timers can go to the children for help. My mom doesn’t need financial help from me, but I drive her around some, pick up stuff at the store, etc.

Alas, being called to celibacy through my being afflicted with SSA, I have no children to whose help I can look forward. My SSA has also estranged me from my family, so I am not close to any nieces and nephews I may have. I am within twelve years of retirement, and these things are much on my mind. Financially I will be OK, but I worry about other things, like day-to-day errands and chores. My friends are slowly starting to die off, so I may get to the point where I don’t even have emergency contacts. The level of caregiving through Council on Aging in my area is pretty incompetent, judging from the information I get from a friend who works for them. I can only pray that I will be able to stay independent as long as I need to.

 

[Peeps]

It’s almost impossible for the state or any level of government to cut any aspect of teachers’ monies.

They strike.

And then working parents scramble to find day care for their school-aged children. In our city, the Park District, the Rescue Mission, Salvation Army, Boys and Girls Club, the Y, different churches, etc. scramble to create day camps for these school-aged children, but they’re not sure if the camps will be needed for a few days or several weeks depending on how long the strike lasts before the School Board gives in and gives the teachers what they want.

And the parents have to come up with a way to stretch their paychecks to pay for this unexpected expense–of course, they would never consider striking to ask their companies to pay for emergency day care in the event of a teacher strike.

Some parents don’t find the day camp or can’t afford it, and then their children either stay with relatives who take time off work to care for them or with non-working relatives and/or friends who may or may not be capable of caring for children. Or…the kids stay home alone, and in some cases, end up hurt or worse.

No one in the public sector (the ones who pay the salaries) dares to say anything against teachers, those sainted people who work with our most precious asset, our beautiful children! (Never mind that the same party who supports teacher strikes also supports increased abortion rights so that it will be easier to kill those precious assets.)

So what is the State to do? Cut services for teachers so that the state can meet budget and ensure that down the road, there will be enough money to meet the needs of the State?



I can’t imagine cutting services because the Teachers’ Strike is such an effective weapon that no city or town can withstand it for more than a few weeks. It brings the entire city to its knees with no recourse but to give in to the demands.

Until this “Strike” weapon is ended (IMO, by making strikes illegal for public servants, those whose salaries are paid by taxpayers), the states will have little choice but to concede and pay up, even if it means financial disaster down the road.

 

[Augustinian]

It’s almost impossible for the state or any level of government to cut any aspect of teachers’ monies.

They strike.

A lot of states don’t have teachers’ strikes, they just aren’t legal.

 

[Peeps]

But a lot of states DO have teachers’ strikes because they ARE legal, and I’m willing to bet that these are the states that are in financial trouble. (e.g., Illinois)

 

[Augustinian]

In those places, like Illinois, the solution is pretty obvious. Just change the law.

 

[stinkcat_14]

In those places, like Illinois, the solution is pretty obvious. Just change the law.

I think the Illinois constitution complicates things to some extent.

 

[Augustinian]

I think the Illinois constitution complicates things to some extent.

That may be true, but this year’s Janus decision in the Supreme Court may make government employee unions in general less powerful and less able to wage strikes even if outlawing them totally isn’t feasible.

 

[DarkLight]

It’s not always as effective as you think.

For example, a common tactic in no-strike states is “work to rule” - where the teachers refuse to spend any of their own money on anything or any time not specifically listed in their contracts. So they work exactly a school day every day and that’s it. It’s usually pretty effective at shutting things down.

 

[PetraG]

In Oregon, PERS isn’t just for teachers. It is for all public employees. There isn’t a teachers’ strike anticipated here (in spite of relatively low salaries and crowded classrooms) but the state is looking at bankruptcy down the road in trying to fund the pension fund.

We do have counties with drastically reduced services, including police. I’d say our state and local budgets look as if they’ll get worse before they get better. Giving enough money to seniors so they can have the necessities of life wouldn’t be the worst thing for some depressed local economies in this country. The older people can probably be depended upon to spend it.

This is another problem, by the way, that I’ve heard about for most of my adult life: the Baby Boomers Aren’t Saving Enough for Retirement. When you don’t save, you can expect you are going to be living on a shoestring in old age. When someone who has saved their whole life gets scammed into destitution by thieves, though, or when a health crisis drains a couple’s entire life savings, that really boils the blood.

 

[Augustinian]

When someone who has saved their whole life gets scammed into destitution by thieves, though, or when a health crisis drains a couple’s entire life savings, that really boils the blood.

I can understand someone getting angry if they are cheated.

But if you live long enough, the vast majority of us end up suffering from illness and it is often an expensive situation. You should be more accepting that this is likely. Sure, I might walk out here some day and get hit by a bus or shot in the back of the head-- but it is just a lot more likely I’ll contract cancer and endure procedures and expensive inconveniences for years before expiring.

 

[PetraG]

I can understand someone getting angry if they are cheated.

But if you live long enough, the vast majority of us end up suffering from illness and it is often an expensive situation. You should be more accepting that this is likely. Sure, I might walk out here some day and get hit by a bus or shot in the back of the head-- but it is just a lot more likely I’ll contract cancer and endure procedures and expensive inconveniences for years before expiring.

No, I mean that certain medical costs are far far beyond what a typical wage-earner can save to meet. The vast majority of us, by the way, actually do not end up facing medical bills in that section of the stratosphere. People without insurance who have to face them before age 65, however, can have a lifetime of savings wiped out.

Our health care “system” isn’t a system. There are people who are working who aren’t covered and people who do nothing who are. Who can get insurance and who doesn’t have it is almost arbitrary. This is a source of bankruptcies that really ought to be addressed. I don’t know how that is done, though, because the current situation has so many entrenched ways of doing things. I do think that guaranteed health care with sliding-scale co-pays through which everyone pays at least a little something for accessing the care is the way to go. (People have this way of misusing and abusing anything that it totally free but not compulsory.)

 

[DarkLight]

Our health care “system” isn’t a system. There are people who are working who aren’t covered and people who do nothing who are. Who can get insurance and who doesn’t have it is almost arbitrary. This is a source of bankruptcies that really ought to be addressed. I don’t know how that is done, though, because the current situation has so many entrenched ways of doing things. I do think that guaranteed health care with sliding-scale co-pays through which everyone pays at least a little something for accessing the care is the way to go. (People have this way of misusing and abusing anything that it totally free but not compulsory.)

Only thing I’d add to that is you probably want a cap on total copays. A lot of chronic stuff can kind of be nickel and diming people to death rather than one big bill. You get the issue that each cost might be affordable individually, but they’re not all affordable together if someone has to see multiple doctors and take multiple medications.

 

[PetraG]

Only thing I’d add to that is you probably want a cap on total copays. A lot of chronic stuff can kind of be nickel and diming people to death rather than one big bill. You get the issue that each cost might be affordable individually, but they’re not all affordable together if someone has to see multiple doctors and take multiple medications.

Exactly. Many times even insurance co-pays top out at some point. Having said that, any amount of universally-available health care that was free would certainly be misused if there was no co-pay at all.

 

[DarkLight]

Exactly. Many times even insurance co-pays top out at some point. Having said that, any amount of universally-available health care that was free would certainly be misused if there was no co-pay at all.

Yeah, in theory I’d be ok with a copay, I’d just want a little more thought put into who judges who can afford what. A lot of stuff right now is designed as pure income-based, and that can cause problems if someone has expenses that are well above average. I’ve seen it as a major complaint of parents with special needs children - often financial assistance is based on what an average family with X number of children can afford.

 

[PetraG]

Yeah, in theory I’d be ok with a copay, I’d just want a little more thought put into who judges who can afford what. A lot of stuff right now is designed as pure income-based, and that can cause problems if someone has expenses that are well above average. I’ve seen it as a major complaint of parents with special needs children - often financial assistance is based on what an average family with X number of children can afford.

Writing laws that are wise and fair is very difficult under the best of circumstances. I don’t think I’m going out on a limb with anybody when I say our lawmakers are not working under anything remotely approaching the best of circumstances.

 

[StarMapp]

The government CAN return to the people the money that was lost by large investment firms in the 80’s. I know a man who is having financial problems today and would not if the government would only prosecute them, and force repayment. BTW: The criminals received a nice retirement package from congress.