A recent survey conducted by the Employment Benefit Research Institute revealed that only 13 percent of workers were "very confident" with regard to being secure in their funding and ability to retire.
Our Los Angeles bankruptcy lawyers understand that twice that number, nearly 30 percent, responded they weren't at all confident when it came to whether they could retire comfortably. That is three times as many as had responded this way in 2009.
About a fifth of the respondents said they were not very confident about 40 percent said they were somewhat confident. So essentially what we are looking at here is almost 90 percent of people who are lacking confidence in their retirement.
This is despite the fact that the housing market has been reporting significant gains and the Dow has been hitting all-time highs.
There are a number of reasons why this could be. Those include:
- A rising cost of day-to-day living expenses;
- Soaring costs for health care and long-term care;
- Inflation that has outpaced earnings, meaning money doesn't go as far as it once did.
Even those who seemingly did everything right - made smart investments, squirreled away as much savings as possible and worked to live within a budget - are still worried that there would be no way they could retire in a reasonable amount of time.
Another key reason people aren't able to stockpile as much savings as they need is because they are often still working to pay off piles of debt. This is where a Chapter 7 bankruptcy filing can be a strategic move to help you become better prepared for retirement.
Consider that you may technically be able to continue paying on your debts. However, if doing so has become a significant impediment to your ability to set aside an adequate retirement fund, it may be time to explore a discharge of those debts through bankruptcy.
Aside from child support payments, student loans, alimony and certain kinds of taxes, most debts can be discharged in a bankruptcy. That includes medical bills, credit card debt and most other types of loans.
Consider that in 1997, about 2 percent of all Chapter 7 bankruptcy filers were over the age of 65. By 2007, that figure had climbed to 7 percent. And it has continued to increase as we have trudged on through the recession, during which the housing crisis in particular delivered a painful blow to older Americans.
There are certainly benefits to filing for bankruptcy while you're in retirement. However, if you can get ahead of the problem before you find yourself on a fixed income, you may be able to secure yourself a more stable financial position.
It may be especially important to do so now, as we know that certain federal income supplements are increasingly uncertain. The funding for Social Security Disability Insurance, for example, is set to be completely depleted within just three years. There has also been a fair amount of speculation on the health of Social Security retirement funds.
Even though we all paid into those programs, there are fewer people contributing today than there were even 20 years ago because the population is aging - and will continue to do so for the next several decades.
Filing for bankruptcy doesn't make you failure. Many times, it's the smartest financial move you can make.