California Seniors Face Bankruptcy Risk

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California Seniors Face Bankruptcy Risk
Story by Suzanne Blake

Californian seniors are at the highest risk of bankruptcy, according to a new report from Moneywise.

When choosing a place to live out your golden years, bankruptcy might be nowhere near your mind. But some states have a considerably worse economic climate for the elderly living there, and California topped Moneywise's list for the highest risk of senior bankruptcy.

Elderly Californians saw a risk score of 69.72 out of 100, and a whopping one in five elderly Californians had an annual income below 150 percent of the federal poverty line.

Currently, that is set at $15,600 per person and $20,440 per couple.

While California's debt ratios are often dismissed because the average income and net worth of residents there is so high, Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, still said the state proves difficult for seniors on fixed budgets.

"No matter how you look at it, this high risk of bankruptcy for the state's seniors is alarming," Beene told Newsweek.

"While debt is still a concern when you're in your prime working years, the hope is you'll eventually be able to pay it off and retire with the savings you've accrued. What we're seeing in some California cities are seniors that never got that debt paid off and are now swimming in high payments from mortgage, auto loans, and even lingering student debt. It's the perfect storm for these individuals that could lead to financial ruin in a time considered to be their golden years."

The report took into account several factors, like poverty rates, healthcare costs and debt ratios to decide which states had the least senior-friendly financial conditions.

Californian seniors are dealing with a variety of economic challenges compared to their peers in other states. They face 27 percent higher average utility costs and also spend an average of 26 percent more on transportation and 12 percent more on groceries than the national standard.

Behind California were Alaska, Massachusetts, Hawaii and Maine, which likely due to higher costs of living also saw their risk scores set in the 60s.

For seniors looking to avoid bankruptcy, states with lower costs like Iowa, Nebraska and Wisconsin all scored among the top, with risk scores near 25 or below.

If you are a senior in one of the more financially risky states, though, Beene recommends you look at ways to generate more income, even if that means working longer and saving more.

"Bankruptcy may sound like an appealing way of dismissing some debt, but even later in life, it's a financially devastating process that is physically and mentally straining, not to mention terrifying if you're looking at losing your home, car, and more," Beene said. "No matter what anyone says, bankruptcy isn't the easy way out and should be avoided at all costs."

Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, said many seniors face the tough decision to continue living in California during retirement or leave their lives behind and choose a less expensive state.

"This dilemma explains why many seniors relocate to low-cost states like Florida or Texas," Thompson told Newsweek. "California's rising cost of living has increasingly priced out those on fixed incomes. Senior incomes are not rising fast enough to keep pace with everyday living expenses, leading to the risk of overspending their assets to cover these costs."

While other states also deal with inflation, California's problem is a bit more pronounced, with the state seeing some of the highest income tax rates.

He added: "Their fixed incomes are being eroded by inflation and taxation, particularly sales and local taxes, making it harder to survive as their incomes do not keep up with the rate of inflation."

[牛河梁]

社安金加州好像免税

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大头在联邦。加州比别州贵迫使加州人需要更多钱去维持同等生活，因此交比别州多的税。

[Mouseinhouse]

傻白甜大量沦为低层是不争的事实。