Once upon a time, bankruptcies were an uncommon occurrence, made as a last-ditch effort by people who saw no other way out of their financial woes. These people were often middle-aged. Today, not only are the numbers of bankruptcy cases on the rise, but the people who file for them increasingly belong to an older demographic.

A recent study found that seniors filing bankruptcy now make up 12 percent of all relief claims; this is in stark contrast to numbers gathered in 1991, when just 2 percent of filers were seniors.

While there are many factors that have contributed to this alarming rise, changes in 401(k) options and costs associated with medical care play a big role.

Unlike the generations before them, today’s seniors have had less options when it comes to retirement plans. In response to increased life expectancies and pension risk, many companies have either eliminated plans altogether or have made the change to less-predictable 401(k) plans. This has made it difficult for many to steadily plan and save.

Longer life expectancies are also creating more of a need for medical care, without much wiggle room to pay for it. With sky-high medical costs and a decrease in the amount of care available through programs like Medicare, retirees are finding themselves in tight financial spots that necessitate bankruptcy claims.

If you’re nearing retirement and are unsure if you’ll be able to meet your financial obligations with your savings, there may be another solution. A HECM loan* allows homeowners to borrow from the value of their home without making payments. Borrowers keep the title to their home, and the bank recoups the money borrowed later on once the house is sold, if property taxes or homeowners insurance goes unpaid, or after the owner passes away.

I want to educate you on the right decisions for your financial future and I’m here to help answer any questions you may have to make sure you enjoy your retirement with financial security. Don’t hesitate to reach out!

*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.