Baby Boomers and Bankruptcy

The baby boomers are made up in part of the generation who is currently entering retirement. About ten thousand individuals a day, since last year, are entering retirement. That is a staggering number. It is no wonder the federal government has been scrambling to determine how to the social security fund and other government benefits will manage to cover the great influx that is happening of people entering these systems and which number will continue to rise in the years to come. Nearly 35% of the baby boomers have been living almost entirely off of social security and other government benefits. At Salcido Law Firm, we have encountered what seems to be a rising number of individuals in this category who find themselves seeking bankruptcy protection during years which they should be enjoying their retirement. While we are always more than willing to help, we offer below a few short tips for the baby boomer generation to stay out of financial trouble.

Supporting Adult Children

We all love our kids; however, as a retired individual or couple, you might simply not be able to afford supporting your adult children. Consider the following statistics:

  • 93% of baby boomers have provided at least some financial assistance to adult children, 86% of which say they would help them again even if it hurt them financially.
  • 71% of baby boomers have paid for their adult children’s college tuition.
  • 55% of baby boomers allow their adult children to live with them rent free.
  • 53% of baby boomers have helped their adult children buy a car.

There is no doubt that struggling adult children are becoming a drain on parents. This seems to be on the rise as student loans are increasing in size while job opportunities for recent grads are decreasing during the recession. If you want to maintain your financial stability and secure retirement, you may have to do less for the adult children you already raised and supported.

Supporting Parents

Not only do baby boomers support their adult children sometimes to their own detriment, many are also supporting their own parents. Consider these stats:

  • 58% of baby boomers surveyed say they help their parents in some financial way.
  • 22% buy their parents groceries.
  • 15% pay their parent’s medical bills.
  • 14% have paid their parent’s utilities.

Baby boomers are in a tough spot where they may be helping adult children and their own parents get by. However, this is unfortunately leading to their one financial ruin in many cases. Our advice is not to necessarily stop helping your adult kids and parents; it is simply to only to never do too much where you put yourself in debt and potential risk of bankruptcy.

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