We don’t always think of retirement as being a time of financial insecurity. With savings being used up during times of financial crisis, however, retirement may require the use of social security funds as a primary source of income.
A recent story highlighted the plight of one such retiree. He worked as an engineer in the aerospace industry. For years, he lived around the country, going from job to job. Then in his 50s, the jobs dried up. What he thought would be a short-term period of unemployment turned into permanent job loss. After burning through his small 401(k) nest egg, the once-successful engineer became homeless. He took a job at Starbucks and slept outside at night. When he became eligible for social security benefits, his life changed for the better. He is now able to pay for a small room that he rents from another retiree. He can now buy food and even save a little money each month for emergencies.
Though the scenario may be new, the issues that caused the problem are not new. Job loss or other unexpected life issues can permanently damage an individual’s financial outlook. For those too young to receive social security, the outlook may seem even bleaker.
For these individuals, it may be helpful to investigate the possibility of filing for bankruptcy. Chapter 13 bankruptcy can provide a fresh financial start for those who have lost their jobs and are unable to pay their debts. In some cases, a bankruptcy filing may stop a pending foreclosure and allow debtors to pay their debts over time pursuant to a payment plan.
Source: NPR, “When ‘Fixed Income’ Means Getting By On Social Security,” Ina Jaffe, Oct. 31, 2013