PHOENIX — Older Americans are filing for bankruptcy at higher rates when compared to younger populations, according to data from the Consumer Bankruptcy Project.
Since 1991, bankruptcy rates doubled for those 65 to 74 years of age. The study said disappearing retirement plans, like pensions, were among the reasons.
“Nobody is going to be responsible for your retirement except for you,” said John Chichester, a senior wealth strategist with Trust Bank.
Chichester says without pension, the responsibility has shifted from the corporation to the employee.
The senior wealth strategist said it was never too early to start saving.
Elizabeth Mayer agrees. She says she’s been putting money aside since her early 20s.
“It’s all about saving, making sure you’re secure for your future and you always have that backup in case you need it for any emergencies,” Mayer said.
Mayer’s niece, who didn’t want to share her name, says she isn't ready to save.
“I have not started planning for retirement at all because I’m still in college, so I’ll get there,” she said.
Chichester said recently, he’s seen more of his older clients worry they’re behind.
“And because of that, they’re taking on more risk than they really probably should, but they’re doing it because they’re trying to make up for lost time,” Chichester said.
In contrast, those in their mid-20s were more careful with their income.
“What they don’t realize is that because they’re so young, they actually have the ability to weather a lot of these storms, a lot of these ups and downs in the market,” Chichester said.
“I know my dad had to medically retire at 34, but I guess that still didn’t kick it into gear for me. I still have no idea what to do,” said 21-year-old Alexis Cupato.
Chichester gave the following three ways for younger generations to safely save for retirement:
- Establish a budget.
- Take advantage of retirement plans from your employer.
- If you head to another job, roll your 401k into your new company, no matter how small the amount, because cashing out will likely mean a penalty from the Internal Revenue Service.