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Retiree Financial Problems August 28, 2008

Posted by shaferfinancial in Uncategorized.
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One of my consistent observations is that the current retiree population is, as a whole, in serious financial danger.  Maybe, its because I live in Florida and have seen much retiree’s in my mortgage and insurance practice over the years?  Maybe, the sheer number of retirees in my area makes me more sensitive to their issues?  Bottom line, is that the current crop of retirees should be doing quite well, because they lived through the greatest economic growth (1945-1980) in the history of the world, a majority have defined benefit pensions, and had stable work environments through much of their working years.  In other words the economic deck was stacked in their favor.

What I observed, and now we are starting to see the data demonstrate, is that this cohort is in trouble.  The latest study on bankruptcies is only the tip of the iceberg.  Those 55 and over once (1991) made up only 8% of bankruptcy filings, now (2007) make up 22% of filings!  The filing rate for those 65-74 years old is up 125%, while the rate for 75-84 is up an astounding 433%!  Wow.

I have said this before, but it bears repeating, if the advice being given is failing the majority of people, then we need to change the advice.  This study’s (Consumer Bankruptcy Project) author goes on to state “there is no evidence that the problem is consumerism.”  No, the problem is the save/invest in mutual funds/401K strategy.  There is simply no room for common experiences, like sickness or layoffs, in this strategy and when these common events occur, they devastate people’s financial lives.

Now here is a question for the readers.  What happens to these elderly folks after bankruptcy?  No longer able to work or at least work at good paying jobs, dependent on government and family handouts, these folks are locked into a nightmare at the end of their lives.

Ready to change your thinking now?  Bring your retirement into focus? Then click on contact at www.shaferwealthacademy.com!

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