Wednesday Morning Farmers’ Market
This Week in Elder News: 23 August 2008

The Poorest Elders

category_bug_journal2.gif My wallet was empty when I left for the Farmers’ Market Wednesday morning, so stopped at the ATM for $100 figuring I’d have enough left over for whatever comes up over the following few days.

At the Market I bought two melons, a lettuce, some blueberries ($7 a quart), blackberries and raspberries ($3.50 a half-pint), a bunch of four yellow beets, one huge tomato and a gorgeous peach.

To save a little gas, I have recently taken to doing my supermarket shopping on Wednesday too, on my way home from the Farmer’s Market. My list was short this week: yogurt and pineapple juice (for smoothies), a piece of fish for dinner, whipped cream (I’m not allowed, but the cat likes it as a treat), carpet spot cleaner (that cat throws up now and then), a good, whole grain bread ($4.29, up from $3.79 two weeks ago!), a pair of candles for the table and a bag of dry cat food.

On a whim, I picked up a pound of green grapes (Do you know how few that is? Grapes weigh a lot). Oh, and a box of three pot scrubbers. Ten items.

Near home, I realized I’d forgotten toothpaste, so I stopped at a drugstore and was shocked, when I opened my wallet to find only $20. How could that have happened?

I’ll admit I overdid on the amount of berries I bought, but not by that much.

This was not an extravagant shopping list, yet I spent $80! I don’t keep a close count, but not so long ago – only a few months - I would have expected to spend about $50 for the entire trip, both stores. CNN reported yesterday that food prices from July 2007 to July 2008 increased by 8.7 percent.

You have to ask what these folks are smoking. They certainly haven’t been in a grocery store lately; the increase is much higher over a year than 8.7 percent.

I won’t go hungry any time soon, but some people will – and some of them will be elders who have only Social Security to support themselves.

It doesn’t take much effort to find dozens of news stories about food banks and Meals on Wheels programs that are hurting financially and cutting back. Donations have dropped off, volunteers who can no longer afford the gas for delivery have quit and funding organizations have not increased their stipends.

For those of us not living in the deep South, the approach of winter is frightening. My heating fuel bill for the coming season is double what I paid last year and I’ll be turning down the temperature lower than even last year. Electricity costs are up too.

I’ll get by, but I fear for many elders and there doesn’t seem to be any planning or help coming from the government. Senator Barack Obama says he will eliminate income taxes for elders living on less than $50,000 a year. Well, first he must get elected (no guarantee) and then the legislation must get through Congress (no guarantee), so it won’t help any time soon.

And anyway, low-income people have small tax bills. Removing the tax won’t help enough at the rate of inflation we are experiencing which is predicted to increase even more.

In our May survey of elderbloggers, nearly 25 percent of 390 respondents reported annual incomes lower than $25,000.

income graph

Think of it. $25,000 is barely more than $2000 a month for shelter, utilities, transportation and food minus about $200 a month for Medicare and before the cost of any prescription drugs. Millions of elders live on much less than $25,000.

Unless we figure out some way to help the poorest elders, and do so within next couple of months, my own expenses tell me we will be hearing of elders dying from hunger, lack of needed drugs and freezing to death this winter.

It doesn't need to be this way. There is plenty of money in the U.S. It's just being distributed unfairly. Watch Senator Bernie Sanders of Vermont explain why there is no money in poor people's pockets and think about what he says very carefully when you vote in November. [10:00 minutes]

[At The Elder Storytelling Place today, Elizabeth Westbrook tells us about a friend who made A Bed For Drunk Robins.]


All you have shared I am doing and aware of. Making one trip for errands, watching utilities, buying nothing but necessities and planted a small garden.
Being a single mom for a number of years I have always watched every penny and felt reasonably secure. At the present time I have a feeling of uneasiness.
A year ago I made a major lifestyle change from a small town to the big city. So far the only difference in cost for my city lifestle are my taxes. I can always relocate again but truly do not want to.
Since there is nothing I need and nothing I want and seem to be healthy I am seemingly in a good place. Because of interest rates my income has decreased 30%. Again, I am fine but wonder what is on the horizon.

There is no end in sight to the rise in food prices, and every other product that needs to be transported to us, now that we are on the downside of the oil bell curve. I strongly urge your readers to check out a film called "The End of Suburbia." It explains the future, and it is amazing. It will scare you, but it will also outline how we can survive it.

Yes. A timely commentary, and Senator Sanders was very convincing. So what do we do? He described the problem - including the return of the wealthy in this country to the mind-set of the old robber-barons - and the way the middle class is sliding into poverty. My partner is already retiring, and will collect only $1500 a month in SS benefits. That's fine while I'm still working, but what will it be like for us when I retire in another three years or so? I'm trying desperately to maintain an optimistic attitude about all of this, but that teeny tiny percentage of people who control (and spend) all the money are really starting to get on my nerves. And, the fact that 18% of children in this country are food insecure is simply an abomination.

While we are busy advocating for the elders, we could also be educating the youngsters. They need to understand that uncontrolled population growth has a huge cost, globally, and that they should not just live within their means but live so that they can save for their later years. My years of living on 1/3 of my income (with 1/3 for taxes and 1/3 for investments) were ridiculed by some of my peers; but, it was an investment in my future.

The future is here. Now my peers are whining that they don't have enough retirement savings. It's hard for us "ants" to have much sympathy for the "grasshoppers". That said, I do understand that not all elderly poor were profligate spenders in their youth; however, there are surely too many who fit that description.

It doesn't feel right to be constantly bailing out those who were unwise--consider the mortgage market fiasco. Why in the world should we be making unthinking people whole? (There were interviews on the radio of people crying about losing their "starter, 6-bedroom, $675,000 'dream' home" or their "$2 million dollar house"--homes that most of us could/would never have considered buying.) I'm getting far afield, so I'll stop there.

Well...there is one more thing that I want to mention. While educating the youngsters, someone should tell them that they need to factor taxes on withdrawals into their IRA equations. When the financial institutions give comparisons between IRA savings and non-IRA savings, they don't mention that, in the end, the IRA savings account is actually worth only 60-70% of whatever the balance is. One must pay income taxes on the whole shebang, as withdrawals are made--at one's top marginal tax rate. So, comparisons should only be made--after taxes.

Yes, Ronni, and the worst part of the terrific rise in food costs is that those prices snuck up on us and we weren't prepared.

Remember back in the late 70's when inflation was rampant? When you bought a can of peas it had 6 price labels on it. As you were walking up the canned vegetables aisle the boy was sticking a label with a higher price on it to the top of the can.

It was terrible but everybody knew what was happening and you watched prices being adjusted and you adjusted your shopping habits,too.

But,now,there is no mention of serious inflation. All you know is that you are spending more and more money for less and less food.

Like everything else that the Bush Administration has brought us,rising food prices just happened when we weren't looking and naturally, Dubya and gang didn't feel the urge to warn us or try to curb it.

Remember this treatment in November and vote accordingly!

Gosh,so 50,000 dollars is considered poor in the States? Your cost of living must be horrendus. We are noticing food and utility bills going up all the time and are having to tighten our belts but we're just about managing on +/- 3000 euros per month (depending on sterling exchange rate) between five people! There are pensioners in England who have to survive on far less than that.

Cop Car:

While I agree in principle with your "thirds" behavior, not many people make enough money to live that way, especially now when inflation has outstripped salary increases for more than a decade.

Often too, catastrophes wipe out the ability to save for several years - family difficulties, health, accidents, job loss.

Three times in my working life, such things happened that wiped out my savings and took several years to pay off the rest.

On another occasion, near the end of my working life, I showed up at the job one day to find the door padlocked and the owner gone - owing me back pay and expenses of more than $30,000.

It was at the beginning of the dotcom bubble burst and took me 14 months to find another job (at half the salary) by which time I had used up my savings just to live, keep from losing my home and pay off those expenses that were on my own, not a company credit card.

Plus, I was halfway through about $12,000 in dental work that could not be left unfinished. I know all about taxes on early withdrawal of IRA money.

Mine is not an isolated case. Sure there are some stupid people, especially those who bought mini-mansions with no money down on adjustable-rate mortgages and I almost agree that it's not the taxpayers' burden to bail them out. (No one bailed me out on those catastrophes I went through and they were painful, scary years.)

But I don't want to judge all these people either. I made some (much less expensive) stupid money mistakes when I was young. But back in those days, there were no predatory lenders luring me into gigantic debt that I didn't understand. And not everyone is as smart as thee and me ;-)

We as a country must find a way to more equitably share the wealth. We could start with universal healthcare and salaries that match productivity which has increased enormously while salaries have stagnated.

Oh, and to follow up on Nancy's last sentence:

Vote accordingly in November and not just for president. Don't forget that Congress writes legislation.

Reading this and listening to the Senator brings to mind what I witnessed recently. As I was sitting at the CVS waiting for a prescription to be filled for my husband, an older woman was informed by the pharmacist that her medication was no longer covered by insurance and would cost $88.00. She was stunned. The reason given was that something similar was now available OTC. She turned and walked out of the store. I felt horrible as I'm certain all who heard did as well as the pharmacist himself.

Yes, although not an elder yet (turning 49 on Monday),being single with a mortgage does make me very uneasy with the high cost of EVERYTHING. My measly salary getting a simple 3% raise for the past four years doesn't even cover the yearly higher cost of my personal property tax every year.

So, keeping my fingers crossed that my health holds out and am able to keep my job, my house will be paid off in 7 years!! Lots of friends think I'm crazy for throwing every extra penny I have into paying off my house but I really need that peace of mind.

Oh, and don't get me started on the rising cost of CAT FOOD!!

Here in the deep south, the situation with heating is reversed. In the summer, with temperatures in the 90's and 100's, we see older citizens dying because of the heat. There are some charities that pass out fans occasionally, but it's not nearly enough.

Many elders turn off their air conditioning because they cannot afford the electric bills. I wonder how many elders have their lives shortened by the extreme heat?

My wife will be working for a few years more, so we are not hurting right now. But we've seen the value of our investments dwindle with the stock market, and live in fear of what we'll have to live on when she does retire. We're trying to save now, pay off what we can and sell what we don't need to get ready for that dreaded day. But at the rate things are going, it might not be enough.

The current situation cannot go on forever, with the rich getting richer and the poor getting poorer; the country squandering billions on tax cuts and a misguided, futile war; with prices getting higher and higher with no end in sight.

There is a day of reckoning coming, and I tremble at the thought of what that might entail.

Just a couple of little observations on this topic. First, last night a news story indicated that a number of seniors are already forced to forego medicine. They fell into the 'donut hole' and couldn't afford to pay the next $4000 or so out of pocket before their meds would again be covered. Second, if the government has no obligation to bail out the people who signed up for what amounts to fraudulent mortgages why does it seem that they have a vested interest in bailing out the banks that purchased the mortgage backed securities? It seems to me that the moral principle that one should be responsible for ones decisions should hold for both groups but it obviously does not. I think the description several bloggers have picked up on which describes our system as capitalism for the lower classes and socialism for the upper classes is quite accurate.

Is this a great country or what? ;(
Bernie Sanders does what I wish every politician would do; he backs up his position with indisputable facts.

Voters must start looking at facts instead of listening to sound bites. Hold the candidates feet to the fire and check out what they are saying. Make them prove it as Sanders did.

It seems through history greed off and on runs amok as we see right now. It damages everything and I don't even see how it benefits those amassing such wealth as they look around themselves. They must look only at what they own and want to avoid feeling it. It's like the drug prices which they say has to be that way for investments... except then why such high profits. If they are investing it in new products or improving or test, they wouldn't have it in the profit column. It's a very upsetting time to see greed admired instead of compassion. If McCain gets in, we'll have more of it in spades given his past with the Keating 5. He presents himself one way but what he's lived is something very different. I just hope Americans quit being duped by things like flag pins but I don't know...

While I strongly agree with the senator's message I think that there is a problem with how this issue is being communicated. For many Americans when they here that "we have a problem with inequality of income" they assume that the speaker thinks that we should have equal income. Which is almost unAmerican :-) That is why it is much better to talk about the shrinking of the middle class or the robberbarons or the unfairness of our tax system. I hope that Obama as a great communicator can come up with a way to shape this issue that reaches the hearts of the vast majority of Americans who believe in fairness but don't believe in equality of income.

We have, at one time or another, been in every one of those income categories. I certainly preferred the one on the far right. Too bad we aren't still there, especially now that mr. kenju has fallen into the dreaded doughnut hole for Medicare drug payments!!

I "retired" a little more than a year ago and my timing couldn't have been worse! Since then my investment portfolio has tanked by 25% and I can no longer look at it.

Our house is paid for and we carry no other debt. I am not old enough to collect social security so we are living on my husband's $961/month plus our RMD of about $4K per year, or $16K/year.

When I start to worry (mostly at night when I can't get to sleep) I think about the other half of the world, 3 billion poor souls, who are living on less than $2 per day.

I then feel blessed to have my health, a warm, comfortable bed to sleep in, and food in my stomach.

We don't eat steak every night, but I know we consume more calories than at least half the world.

And yes, I'm back in the job market, but finding anyone to hire you after 40 is depressing beyond words.

Before this economic downturn and inflation I was thinking about retiring early, but these bad times have totally scared me away from thinking about that now. I've upped my 401k deductions and I'm figuring out how to cut costs now while I still have a large income.

Ronni, your posts are helping me prepare for the future. Thanks. And thanks for that informative graph about retired income.

Powerful post and video! Wish I could figure out a way to make my Representative view it, then respond by justifying some of his issue votes. My Senators do relatively well in their issue voting, but clearly as a whole our Congress does not. The current Administration, not surprisingly is, as I anticipated 8 years ago and still is, a lost cause.

I would like to see a list naming all the Senators present when Sanders was speaking. Were the ones there actually paying attention or was he preaching to the choir? Maybe there isn't even a choir or the country wouldn't be in this mess.

The financial crisis in this country is likely a consequence of many causes commenters above have noted. Certainly, individual responsibility and choices must bear some of the brunt as a cause of some people's insecure financial situation. So, do we just write them off and say tough nuggies?

Also, unexpected circumstances beyond an individual's control accounts for some of those same people and others similar financial insecurity. Are we going to allow them to flounder, too?

I've experienced ups and downs in my life from the time I was a child for all the reasons above. I think a lot of factors came into play, some for which I cannot take full credit, or accept full responsibility for the mistakes. I am not so naive as to believe that until the day I die there still remains the possibility my situation could change.

Much depends on an individual's health, or that of a loved one, and that can change from moment to moment.

There is something obscene about a nation's population and government that would allow others, whatever the reason for their poor living situation, to lack having their most basic needs met, or to be unable to have an opportunity to try and fulfill those needs themselves.

Yes, we must hold "feet to the fire" of those we elect to Congress and entrust to top leadership positions. We must find a way to empower them to make the hard decisions setting our policies on a track to re-build this nation. We must assure them we will stand behind and support them against the forces of greed and self-interest.

Writing about issues on blogs is important, but not enough.

Contacting those we put in office is vital, but not enough.

Voting en masse for change is critical but just a beginning.

Wouldn't it be nice if the good senator's message was broadcast on all local & national newscasts for at least 3 days rather than all indignation surrounding John Edwards behavior. Now that's a newcast I would watch! Dee

You might find it interesting, illuminating, to read about the Nationall Elder Economic Security Initiative. It's one way of trying to address this issue.

Yes, it's all the government's fault.

That's a great idea, Cop Car, for those who don't worry about making it until the end of the month. As a single-parent public school teacher since 1975 with a five year old son and sporadic child support at best, I barely made it. One-third of my salary would have been from almost $4K to $16K a YEAR from then until I retired.

For some reason I'm doing OK now with my teacher retirement and social security, but it gets more expensive every month. I'm working some part-time jobs and saving that and a bit more from my retirment. So far, so good, but I'm used to living within my means.

Did that sound confrontational? I didn't intend it to. That really is an excellent plan. I just wish I could have done it.

And spare a thought for retirees who have emigrated to other countries and now find their fixed incomes are falling behind rapidly. No-one knows the exact number here in Turkey but it is possibly in the tens of thousands of mainly German and British. Often they sold everything to buy property here and make the move and now they are stuck whether they like it or not. The majority find learning the language really challenging and are unlikely to ever master it to the point where they can have real conversations with Turks. We are fine as I still work at a variety of freelance jobs, but I speak the language fluently which is very much the exception. Also everyone here is still able to lead a healthy lifestyle thanks to good cheap fresh food. But so many of the immigrant retirees thlought that they'd be dining out for the rest of their lives and that just isn't possible as inflation bites. During the winter ahead I am hoping to do some serious research into aspects of this issue and, if it happens, I'll be sure to let Ronni have the results.

Ronni--I believe that it was Marilyn vos Savant who pointed out that the best way to save money is to make money--saving 100% of $10,000/year doesn't stack up against saving 33% of $50,000/year. Absolutely, I agree not everyone can choose; but, among those who can, many choose glamour over practical--the flash over substance. Excluding the extremely poor who have been made so by events beyond their control, many (most?) people choose to live beyond their means. They have more kids than they (or the planet) can afford and consume more goods than they (or the planet) can afford (or than they need). (How does StarBucks make money?)

By the way: I was not writinging about early withdrawal penalties on IRA withdrawals. Even required IRA withdrawals are taxed at ordinary income tax rates--not at the rates that other long-term investments are taxed.

Joy D--We are having a discussion and I did not interpret your input as confrontational (thanks for the concern.) You did, however, point out that my statement about "all those years" was misleading. I could only live on 1/3 of my income after I was no longer paying kids' school expenses. Always, my savings were deducted from my paycheck before I saw it (credit union deposits), and they were significant; but, not fully 1/3. (Thanks for the nudge.)

Cop Car: I didn't misunderstand you. I was just noting that early withdrawal, which can't be avoided sometimes to continue eating, carries horrendous tax penalties.

I'm voting for Barack Obama/Joe Biden because they will change how decisions are made in Washington D.C.

I think this election is the best chance we have to work ourselves out of this economic mess and into a stable and sustainable economy for all.

Thanks, Cop Car.

Ronni-this is a most difficult time..we took a reverse mortgage on our house to help us with the extra cash needed each month or so...good bye paid off house.
Keeping track of each dollar I spend makes me realize that the nearly "whopping" $2,000 a month - which at one time seemed like a fortune...readily disappears before the next month...
Please advise all your readers to apply for all the aid out there...Fuel Assistance and Food Stamps...extra help through Social Sec.-they are there if one qualifies-of course some of us are just a bit over of course....AND THE PAPER WORK to do this - OYE VAY!!!!

I'm planning a little personal protest against supporting the wealthy this year. My definition of wealthy is "can afford to save while paying for HBO."

My protest is to stop donating to the United Way. With automatic monthly contributions so easy to make, I can give directly to the charities I choose...without supporting "community leaders" (read: rich people who are potentail major donors) employed by the UW. I'm beginning to think that if all those six-figure-income folks would quit *giving* to the poor and just pay more taxes, they'd be doing us all a favor.

Assuming the taxes weren't used to invade Iran or Georgia.

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