Hard times mean hard decisions for many senior citizens

On the long ride home from her daily medical treatments, in the back of the Silver Key Senior Services bus with her oxygen tank by her side, Katherine Sorensen can't help but worry about her future.

Like many older Americans, the economic crunch is leaving her with some very difficult decisions to make and bleak realities to face.

Sorensen, 63, has suffered a string of health problems that leave her unable to work. So she's running through the savings from the reverse mortgage on her house, spending 60 percent of her monthly income on medical costs - and skipping some of her prescribed medicines to manage pain and ease her breathing, just to make ends meet. When the cold weather hits, she doesn't know how she'll afford to heat her 112-year-old Ivywild house.

"I'm trying to pare everything down to where I can live on what I'm getting," she said. "I'll put on sweaters this winter and hope for the best."

Sorensen is not alone, said Kathryn Curry, who runs the local franchise of Home Instead Senior Care.

"We've been watching this pretty carefully," Curry said. "Right now they're all freaking out about the stock market, and watching their portfolios take a nosedive. If they lived through the Depression, they are petrified that they are going to outlive their money."

Like Sorensen, seniors are skimping on medicines, as well as canceling doctor appointments, opting not to cool their houses this summer, or not eating three meals a day, Curry said.

"I'm most concerned about the medicines, because that's a profound danger," Curry said. "It's a scary time for the elderly."

A majority of older Americans - 59 percent - are finding it more difficult to pay for essential items such as food, gas and medicine, according to a report from AARP issued in May, well before the current market meltdown.

"We're hoping the stock market doesn't affect us, but then groceries and gas keep going up. It's going to get you one way or another," said Leslie Clayter Sr., 85.

"Social Security is just not enough to see them through, so they come to us to seek employment," said Mary Corrow, project director of the local AARP Foundation office that helps older workers find jobs. "Some own homes and are on the verge of losing them, some have lost their homes and are renting, and some are nearly homeless."

Corrow said she helps workers in their 60s, 70s, and even 80s find jobs, and she sees need across all economic and educational levels. That need is getting harder to satisfy, she said, in a tightening local employment market.

"You might think only people who haven't planned well are affected, and that's an easy way to ease our conscience," said Terry Anderson, program director of Silver Key.

"That is not the case for many of our seniors. They've done all the right things, raised kids, had jobs, owned homes, saved money, and it doesn't work for them anymore because of the way our health care system is set up. They have to watch that nest egg get eaten up by costs before they can get Medicaid."

Once that happens, Anderson said, seniors are forced to rely on a fixed income from the government, and fluctuations in grocery and utility bills can ruin them.

"We're seeing more people tipping over the edge," she said. "We're in pretty dire straits."

Although the situation might be worse for older people who rely on Social Security as their sole source of income, that doesn't mean the more-affluent don't feel the pinch. Some are being forced to delay retirement for a few years or take the "semi" out of semi-retirement.

And everyone with investments suffers as the savings they've cultivated over a half-century are withering on the vine.

Ted Schwartz, president of Capstone Investment Financial Group in Colorado Springs, said he's heard panic in his clients' voices.

"When you get a panic, people just want to sell everything, period, and they don't differentiate between assets that are fine and assets that are not fine," he said. "On the emotional roller coaster, we're somewhere near the bottom in terms of panic.

"We've had people calling, saying ‘Should I stick $10,000 under the mattress?', some saying ‘Should I get more conservative?' and even some saying ‘Is this a buying opportunity?' Older clients are recalling the Depression, and asking if anything is safe, including their bank."

So, is anyone surviving unscathed?

About a dozen seniors interviewed said they're doing just fine by simply tightening their belts and returning to the frugal ways of their youth. Most of them have common circumstances: They're relatively healthy, they live with a child to save money, and their investments are in something very conservative, such as an annuity.

Or, they draw a military pension. The retired population in Colorado Springs might be better off than in most cities, because of the large population of military veterans who have a rock-solid source of supplemental income.

"People with a government pension are in fat city relative to many others, and it's increasingly fat when you look at the fact that it's indexed to inflation," said 77-year-old Erv Simon, who served 26 years in the Air Force, then spent another 15 years as an executive in a private-sector job. "People with retirement benefits like I have are not hurting. They're worried, but they're not hurting."

Yet, he sees the effect of the economy all around him. Simon has volunteered his time for SCORE (Service Corps of Retired Executives) for 14 years, mainly counseling entrepreneurs who are starting small businesses, and says calls from business start-ups to the SCORE office have slowed drastically. He is helping a retired friend with her finances after she watched six years of her planned retirement income evaporate in the stock market. And he wonders if his son, 54, will ever get to retire.

The most painful aspect of this economy, all agreed, is that while business slows and investments nosedive, the cost of health care, food and fuel keeps rising. Like Simon, even seniors who are doing OK worry about future generations.

"I'm very concerned for my children and grandchildren and what we're loading them up with," said Dean Tollefson, 76, a retired college administrator. "It's just awful."