Half of Americans Die With Almost No Money

Almost half of U.S. retirees die with savings of $10,000 or less, but that grim finding doesn’t fully describe the variability and uncertainty that characterize retirement in America, according to a recent study. While some retirees struggle profoundly, living at or below the poverty line, others enjoy wealth and health—in fact, the two are strongly linked—while still others have little in savings but enjoy a decent income, according to the report, based on a survey that tracked retirees from 1993 through 2008.

While 46% of retirees have just $10,000 in savings when they die, “That doesn’t mean their standard of living is very low—they might have a relatively generous pension plan, most of them will have Social Security,” said James Poterba, professor of economics at M.I.T., president of the National Bureau of Economic Research, and a co-author of the study.

But the findings “suggest something about the financial resiliency of these households,” Poterba added. “They may not have much capacity to absorb a shock, such as an out-of-pocket medical expenditure. They don’t have very much in the way of liquid assets they can access.” Read more >>

Broke Americans Can't Even Afford to File Bankruptcy

This year, hundreds of thousands of Americans are expected to be too broke to file for bankruptcy.
The average cost to file for Chapter 7 bankruptcy protection, the most common form of consumer bankruptcy, is more than $1,500, according to recent research submitted to the National Bureau of Economic Research.

As a result, anywhere between 200,000 and one million consumers are estimated to be unable to afford that steep cost this year. The research, conducted by a group of professors from Columbia University, the University of Chicago and Washington University in St. Louis, examined how bankruptcy filings spiked after people received their tax rebates in previous years. They estimate that another 200,000 consumers, who would otherwise not have enough money to file, will use their tax refunds to pay for bankruptcy this year.

"For lots of people, bankruptcy has been taken off the table as an option because of the severe fees involved," said Jialan Wang, co-author of the report. Among those fees is a charge of about $300 just for filing the paperwork with the federal court, while the rest typically goes to bankruptcy lawyers, said Wang. More...