Seniors & Bankruptcy II:
6 Ideas for Avoiding Insolvency
My last article talked about the very real problem of the number of increased bankruptcies among seniors, a problem that has been on the rise since at least 1991. I cited 6 interrelated factors and any combination could lead one to file bankruptcy.
For the last week, I have gone online, researching ways seniors could avoid calamity. I was disheartened, but not surprised, to find no clear-cut strategies. Granted, every situation is different, but I was hoping some things would bounce off my computer screen and hit me in the head. Nothing did, but I found a smattering of plans that could help most anyone avoid financial disaster. Today, I will be sharing what I feel are a few common-sense approaches seniors (and others) can take to avoid bankruptcy.
Plan to Live Longer – For several years, the media has bombarded us with statistics showing that people are, on average, living longer. This is not earth-shattering news. Howard Gleckman, a Senior Fellow at the Urban Institute, recently reviewed in Forbes a study by the federal Administration for Community Living. His review cited that many Americans are not only living longer, but some are financially secure. Of course, this is not true for every retiree. My takeaway? Long before retiring sit down with an estate planner and set up a strategy that will afford you an income well into your nineties.
Downsize – Dave Ramsey, noted author, speaker and money management expert, cites three money-saving reasons why seniors might consider moving into a smaller home. These include decreasing debt, boosting retirement funds and paying off your mortgage.
Get a Roommate– Linda Abbit, a noted author and eldercare expert, cited in Senior Planet multiple reasons for seniors to have a roommate. Saving money was, of course, one reason, but others included help with household duties, companionship and health, and safety.
No Home Equity Loan– Elizabeth Hilbun, a well-known elder care attorney, routinely advises her clients to not take out a home equity loan. There are some pros, but continuing a cycle of debt is why she counsels seniors to consider other alternatives.
Start a Business – To me, it makes perfect sense to start your own business after retiring. After all, seniors have a wealth of experience to draw upon and are often better suited for a startup than someone much younger. Chris Farrell, a contributing editor, in a 2016 Forbes article cites several reasons why seniors should consider embarking on their own venture.
There is no magic pill to take for avoiding bankruptcy, but I do believe we can all be proactive and make better decisions. My 6 ideas are just that, my ideas. I’m sure there are other cost-cutting measures you can take, but if nothing else these are a good start to help you think of other ideas.