The elderly are less prepared for retirement and deeper in debt than ever before.

The Employee Benefit Research Institute’s 2013 Retirement Confidence Survey reveals that only 46% have saved less than a total of $10,000 towards retirement.

The think tank, in its report entitled, Debt of the Elderly and Near Elderly, 1992–2010, found that the percentage of households with credit card debt headed by someone age 75 or older doubled from 11% in 1998 to 22% in 2010.

A 2010 study from the University of Michigan Law School, called The Rise in Elder Bankruptcy Filings, found that those 65 and older are the fastest-growing segment of the U.S. population seeking bankruptcy protection.

Is it a good idea, or just more of the same?

Caught Between A Rock And A Hard Place

It used to be that the elderly scorned debt. As children of the Great Depression, they knew all too well the dangers of being in debt.

Over time, however, the realities of declining economic fortunes set in.  With fewer traditional pensions to fall back on, easy credit and a need to help younger family members survive financially, parents and grandparents began to march towards the red line of debt.

Bankruptcy Protects Social Security And Retirement Accounts

If you’re receiving Social Security benefits or have a retirement account, it’s not going to be taken when you file for bankruptcy.

In addition, the monthly Social Security benefits won’t be counted as income when deciding whether you make too much to file for bankruptcy to wipe out your debts without making payments through the court system.

Save Your Assets For Next-Of-Kin

You’ve been working your entire life. You want to be able to leave something to loved ones.

You may not be able to protect your assets from creditors in a probate proceeding to the same extent as would be possible in bankruptcy.

For that reason, it may make sense to use a bankruptcy filing as an estate planning mechanism.

Let The Golden Years Be Golden

You’ve got a choice.

You could spend your later years mired in debt, dealing with collection calls and letters from angry people demanding money.

Or you could enjoy some peace and quiet with loved ones, passing the days as you see fit.

As far as I’m concerned, the latter seems like the better choice. Even if you’ve got nothing that the creditors can take, the peace of mind offered by the protection of the bankruptcy laws is a powerful tool.