Forbes did an article on bankruptcy and the elderly. In 1991, around 2 percent of bankruptcy filings involved older adults. Currently, that rate is around 12 percent. Of the bankruptcies older adults filed in 2016, almost 8 out of 10 seniors were on the low end of the income scale. It’s something you and your family need to talk about and assess regularly.
Why Does This Happen?
What are some of the reasons for more seniors filing for bankruptcy? Medical care can be one of the biggest factors. Insurance costs alone are high, but the cost of prescriptions and some medical treatments can be crippling on a fixed income.
An American Heart Association study found that medical bills for people with high blood pressure average around $2,000 more per year. The cost of a hip replacement surgery averaged $31,000 in 2015. While insurance may absorb some of this cost, it may not cover all of it. Seniors can end up going into debt trying to afford necessary treatments.
Scams can also drain an elderly adult’s accounts. If your parents fall for a scam, even if they realize it after the fact and report it, the money they’ve lost is gone. It’s very unlikely they’d get any of that money back.
Home repairs, rising heating and electricity bills, and car expenses can all impact your parents’ savings. It leaves older adults struggling to pay bills. As the stress builds, they may feel trapped into taking out new loans, racking up credit card debt, or taking out reverse mortgages. All of that can impact their financial health.
Finances Can Be a Sign of Worsening Health
Finances can also signal that cognitive health is worsening. People with Alzheimer’s often start having a hard time with finances. They forget to pay bills. They spend money on things they already have at home. You may find your mom comes home with several large containers of laundry detergent when she already has three at home.
If your parents’ finances are in bad shape, talk to them about setting up someone they trust as a financial power of attorney. They don’t have to give up control of their accounts, but they’ll have help paying bills and managing their money.
Struggles with finances can be a sign that it’s getting harder for your parents to manage activities of daily living. Talk to them about the benefits of elderly care services. The services are arranged to target their needs. Call our elderly care agency to schedule services.