Older Americans Strain Finances Helping Kids, Grandkids with Debt

Retired Americans are supposed to be enjoying their golden years. Instead, they are increasingly spending their savings helping their younger relatives stay financially afloat.

From high employment to rock-bottom home values, the economic downturn has put a strain on families. As our Chicago bankruptcy lawyers recently reported, middle-age parents may struggle just to pay the mortgage, let alone help their teenage children purchase a car or pay for college.

Because jobs are especially scarce for young adults, many teens and early 20-somethings don't have an income to pay necessary expenses.

This is often where Grandma and Grandpa step in. Many younger grandparents are still working, and thus able to draw on their steady income to offer assistance.

While income for households with people ages 25 to 44 has dropped significantly in the past decade, earnings for households over age 55 have actually risen, according to The Wall Street Journal.

But though baby boomers may have more resources, they often manage to overextend themselves - jeopardizing the future of their finances as well as the finances of their loved ones.

Seniors who whittle away their savings helping their family may not have enough to cover themselves in a health-related emergency. According to the WSJ article, the best way grandparents can assist their kids and grandkids may be to maintain enough money to pay for their own care as they age.

Being too generous with cash not only endangers the balance sheets of older Americans, but it allows grandchildren to make poor debt decisions without consequences - paving the way for them to become financially illiterate adults.

Rather than help grandkids pay down debt, grandparents may be better off helping the younger generation avoid accumulating debt in the first place.

There's a reason those 55 years and older are filing for bankruptcy 12 percent more than they did a decade ago. Between helping family members, paying for rising healthcare costs, and receiving meager Social Security payments, many older Americans have had to turn to credit cards and reverse mortgages just to make ends meet.

For folks of all ages who are struggling with overwhelming debt, Chicago bankruptcy can provide much-needed relief - and a fresh financial start.