One of the things you find when you write about baby boomers on a regular basis is that there is very little consensus about the legacy of this generation.

If you were to go through the archives of this column you would find several instances of contradiction, sometimes from one week to the next.

The boomers spent too much money. No, actually the boomers have plenty of money saved away. The boomers are working longer because they have to make up for lost assets. No wait, they are working longer because they love working. Most are on schedule to enjoy the kind of retirement they always envisioned. Unless of course you believe that most boomers are never going to be able to retire.

One of the reasons for the disparity in assessing the boomers comes down to sheer numbers: Seventy-six million people (give or take a few million) comprise a massive sample upon which to survey. The size of the generation alone dictates that one who studies it is going to come across whatever it is he or she is looking for. The reckless spenders, the frugal savers, the wealthy, the poor, there is plenty of all of them. When it comes to opinions on the baby boomers, we are often going to have to agree to disagree.

But a study published in the September issue of the American Bankruptcy Institute’s ABI Journal makes a persuasive case about the boomers being a generation up to its ears in debt. Written by John Golmant, a statistician, and James Woods, a social science analyst, the study finds that bankruptcy filings are increasing fastest among people between the ages of 55 and 64. In fact, there was a 65% increase in filings by boomers between 2002 and 2007. Baby boomers also accounted for 42% of all filers in 2007.  

So what is causing this surge in bankruptcies?

Golmant and Woods suggest several reasons. They point to the Survey of Consumer Finances that show the median ratio of debt payments to family income declined from 2004-07 for those younger than 45, but increased for those over 45. “An even more telling measure of financial distress,” write Golmant and Wood could be the percentage of families with relatively large total debt payments proportional to their income. The percentage share of families with a debt ratio of at least 40% rose fastest for those age cohorts older than 45 from 2004-2007.

The authors also said that the housing crisis has worsened the “already-precarious financial condition” of boomers. Citing an AARP-sponsored study from September 2008, they note that 28% of all mortgage delinquencies and foreclosures were for persons 50 years and older. Credit card debt is also adding to the financial strain for boomers, as is a decline in net worth. Referencing a study by the Center for Economic and Policy Research, the median household for people between the ages of 45 and 54 lost 45% of its net worth between 2004 and 2009, while the median household for people between the ages of 55 and 64 lost 50% of its net worth.

“Both the general population and the bankruptcy population are getting older, but the bankruptcy population is growing older faster,” Golmant and Woods write. “Older persons are disproportionately represented in the bankruptcy courts.”

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