Seniors send out SOS in face of staggering economy

Nancy Richardson ended her nursing career four years ago to care for ailing family members. Now, at the age of 70, she's looking for work again. She doesn't have a choice.

"It's a big challenge," Richardson says about paying for basic necessities. "I need to have a job. It could change my lifestyle considerably."

Each week, Richardson budgets $20 for gas and $20 for groceries. She's applied for a few nursing jobs but hasn't received any bites.

The silence worries her. If she doesn't find a job in a few months, she knows she'll have to move in with one of her three children.

"I can't afford to maintain a separate household," says Richardson, who lives in Cowiche. "I will probably have to live with my kids, but I'm trying to postpone that for as long as possible."

Richardson's situation is far from unique. According to a recent national survey by the AARP, baby boomers and their parents are making noticeable changes in their lifestyles because of the flailing economy.

The survey, which was given to 1,002 adults aged 45 and older, found that a significant number of seniors are delaying retirement plans or dipping into their retirement investments early. Some are postponing paying bills, and others are having difficulty affording basic necessities like food, gas and medicine.

Jim Dau, national spokesman for the AARP, says some of the statistics are alarming.

When people delay paying bills, they hurt their credit rating, he says. When they don't take their medications now, they could face higher health care costs in the future. And when they take money from retirement funds, they not only give up the compounding interest they would have earned, they also have little time to replace the loss, he says.

"We won't know the true scope of this crisis for years to come," says Dau, who is based in Washington, D.C. "Gas prices are gas prices and food prices are food prices. Everyone is paying them. Health care costs are the 800-pound gorilla."

Verna Wild knows how the economy is affecting seniors. As a program technician for Aging & Long Term Care of Southeast Washington, she counsels people who must decide between paying their health care bills or buying food. She even knows seniors who've lost their homes after medical costs ate up their savings.

"The economy is bad for all seniors," she says. "The golden years is medicine and all the medical bills that go with it."

Wild also copes with unforeseen expenses. A recent back surgery prompted her to buy a wheelchair, van and wheelchair lift. She knows that to afford all this, she can't retire until she's at least 83. She's 79 now.

"The economy, as far as I'm concerned, affects everyone who is on a fixed income," Wild says. "It's bad."

Through her job, Wild helps people prepare for the inevitable. She advises them on how to find the best heath insurance, how to go about buying burial plots and how to set up a living will.

Unfortunately, she believes many people of her generation don't seek help until it's too late.

"It will get worse," Wild says about medical costs. "At this point, there is not much that can be done. We'll just have to wait to see what happens at the next election."

Financial experts in Yakima say they haven't seen seniors change how they spend and invest their money -- at least not yet.

"I think people are still saving for retirement," says Pat Danielson, pension administrator for BBM Financial Services in Yakima. "We're in pretty good shape here so far."

Suzanne Williams, a financial adviser for MEMBERS Financial Services based at the Yakima Valley Credit Union, says people know they should be concerned. Like everyone else, they read tales of spiraling health care costs and watch news reports about the nation's dire economy. But when push comes to shove, they aren't willing to change their habits.

"What I'm seeing is people are not saving money because they want instant gratification," she says. "They're at Costco buying a big screen TV. They're out playing golf. They have a BlackBerry. Their kids all have iPods and iPhones. It's really a choice of lifestyle. They're choosing to cut back on food at home, but they'll still go out to dinner."

Many things are going right in Yakima, she says. There are job opportunities, an influx of new residents from Western Washington, and a healthy housing market -- all of which fuels people with a sense of financial well-being.

Still, she says, people must learn good consumer practices now to protect themselves in the future. This includes buying long-term disability insurance, paying off debt and avoiding use of credit cards.

"If you live within or under your means, you will always have money," she says. "If you live above your means, you'll always be stressed and worried. ... You should choose to be financially responsible."

Spending money on luxuries is all well and good, says Jason Erskine, an AARP spokesman for Washington state. But people should also tuck away savings for tomorrow.

"(Baby) boomers are waking up to the fact that they aren't as prepared as they need to be," he says. "We don't want a gloom-and-doom scenario that the folks in Yakima aren't necessarily seeing what's looming on the horizon, but they need to take a long look to see if they're adequately prepared for their retirement years."

Erskine has traveled throughout the state for AARP's "Divided We Fail" campaign, which is promoting the need to bring Republicans and Democrats together to improve health care and financial security for seniors. During his stops, he listens to hundreds of people bemoan the need for health care reform, he says.

"Year after year, we get more political rhetoric and promises, but we don't get common-sense solutions," he says. "We're trying to speak so loudly that our elected officials have no choice but to listen."

People can do many things to prepare for their future, adds Dau of AARP. By eating right, exercising and not smoking, they can prevent many health problems later in life. People can sock away more money for their retirements, and employers can create new work and training opportunities for those 50 and older.

But true reform, he says, will come only when people demand it.

"We need to hold candidates' feet to the fire and ask them what their plans are to get long-term financial security and health care reform," he says. "Yell at the candidates and don't leave until they give an answer. That's how large-scale change will happen."

* Erin Snelgrove can be reached at 577-7684 or esnelgrove@yakimaherald.com

Spending statistics

According to a national survey conducted by AARP this spring, people age 45 and older believe the economy is in bad shape. As a result, most have modified their investment strategies and have changed how and when they pay for everyday necessities. Among the findings:

? More than one out of four middle-aged and older workers (27 percent) say they’ve postponed retirement plans because of the recent economic downturn.

? Almost 25 percent of people between ages 45 and 65 are prematurely taking money out of their 401(k)s and other investments.

? Younger baby boomers between 45 and 54 are postponing paying bills (27 percent) and are cutting back on medications (17 percent).

? Almost six out of 10 (59 percent) people 65 and older are having a harder time paying for food, gas and medicine.

? More than a third (34 percent) of all retirees have had to help a child pay bills in the last year.

? More than one in 10 (11 percent) retirees have had to seek help from loved ones or charitable organizations in the past year.

? Eighty-one percent of all respondents say the economy is in a fairly bad or very bad condition, and 75 percent think it’s getting worse.

? Almost two-thirds (63 percent) of those polled say they own stocks individually or through retirement plans. More than seven in 10 (72 percent) of these investors say they’ve lost money on their portfolio in the past year.

? While most respondents (58 percent) are not concerned about the effect of mortgage foreclosures on their personal well being, almost nine in 10 are concerned about the impact foreclosures will have on the larger economy. Sixty-four percent are concerned about the effect on their communities.

? Seventy-four percent of all respondents say their elected officials are not doing enough to help people caught in the economic squeeze.


To view the complete survey, go to www.aarp.org/research/economy/trends/economy_survey.html