Economic woes turning golden years into 'worry years'

VIRGINIA BEACH

Nancy Smith, a retired law enforcement supervisor for the federal government, has suffered a $68,000 drop in the value of her retirement accounts in the past year.

That's more than one-third of the total. She doesn't expect to recover most of what she has lost.

Smith, 61, who lives in a condominium in the Foxfire neighborhood, has learned to scrimp. In the supermarket, she bypasses beef and goes for canned vegetables instead of fresh produce. She only buys clothes on sale.

Smith retired last year and lives off her monthly pension check. She's not panicking, but she has started to wonder whether she'll have to go back to work part-time next year.

She loves her country. She considers herself an optimist. Still, "who would have thought that, after 33-1/2 years as a dedicated public servant, politicians' actions and nonactions and greedy big business would turn my golden years into worry years?" she asked. "I'm not going to have that money, and I worked darned hard for it."

Retirees such as Smith are tussling these days with economic demons including steep prescription price increases and precipitous declines in investment income. Compounding the material hardships is a soaring sense of anxiety, though few are reporting financial calamities.

"We are not hearing from a lot of people in crisis," said John Skirven, chief executive officer of Senior Services of Southeastern Virginia. "Who we are hearing from are people who've had difficulty for a long time, and now they're tipping over the edge. They didn't have stocks to begin with, but the increased costs of living are driving them to ask for help when they haven't before."

For example, Skirven said he has seen an increase in the number of people seeking assistance to cover the "doughnut hole" - the gap in Medicare coverage that requires full payment for prescriptions.

"We're not talking about people in abject poverty," Skirven said, "but everyday people who are trying to make their bills."

Some senior citizens who are better off have lost much more than Smith.

One client of Andrew Hook, a certified financial planner and lawyer who is vice president of Oast & Hook PC, held on to significant holdings in bank stocks over his objections, Hook said. Her net worth, he estimated, has dropped by nearly one-third, or almost $400,000.

"I can't tell you how many elderly people own bank stocks," he said. "Their daddy and granddaddy bought it because it's always been good. You hold onto it because it's a good investment. They've been devastated."

They "are not going to be in danger of losing their homes," Hook said, "but they lost a significant portion of their net worth. Their mental security is jeopardized, and they're extraordinarily worried."

Smith was among more than 20 members who attended the monthly meeting Tuesday of AARP's Chapter 5119 at the Princess Anne Recreation Center in Virginia Beach. The topic of the day was high school memories. Reminiscences spilled forth of boyfriends hugged and lost, teachers never sassed, an occasional bottle of liquor sneaked into the prom.

Later, when they spoke of the economic downslide, many voiced concerns similar to those of younger adults - such as gas prices.

"I used to go all over when I felt like it," said Ginny Milliman, a 75-year-old widow who lives in the Strawbridge section. "Now I go to the other side of town, which for me is Virginia Beach Boulevard, only on Fridays. I'm not an organized person, but this has forced me to be organized."

Betty Valz, 73, who lives in Parkside Green, can't remember the last time she went to a mall. She has gone from eating out twice a week to once every two weeks. And now she spends more time - maybe 45 minutes a week - clipping grocery coupons.

It's no worse for Valz, a former business administrator for a Virginia agency, because she has lived with her sister, Margaret White, 76, for the past 13 years. "We can't be on our own," White said.

One area where senior citizens have been harder hit is their reliance on prescription drugs. Smith said her annual drug bill doubled, to $4,000 from $2,000, in the past two years.

On the plus side, many who moved to Hampton Roads to retire say they're still better off, in terms of quality of life and cost of living, than they used to be. Valz said she recently learned that she and her sister qualified for a complete waiver from real estate taxes, under a Virginia Beach program based on their age and income.

"Virginia Beach really is friendly to senior citizens," said Eleanor Holman, 69, a surfer and former administrator with the National Council of Churches who lives in Ocean Lakes. "So while I'm worried, I'm glad I'm here."

Not all senior citizens are even worrying about the economy. At the McDonald's in downtown Norfolk on Wednesday morning, Hubert Short, a retired utilities supervisor with Norfolk, said he feels secure with his Social Security and pension checks.

"It's not bothering me," Short, who lives in Tidewater Gardens, said of the economy. "My children are gone."

Hook said his client's experiences with bank stocks illustrated a crucial piece of investment advice for senior citizens and others: Diversify your holdings. And, he said, try to pay off your mortgage before you retire. "It's not unusual to see people who are 65 and older with significant mortgages on their property," Hook said. Many have had to resort to reverse mortgages.

Ron Pearson, a certified financial planner who runs Beach Financial Advisory Service in Virginia Beach, said another standard tip also applies to retirees: Wait out the market, and don't sell out of panic.

"Their portfolio can ride it out," Pearson said. "The question is, how much sleep can they lose in between?"

Those on limited incomes, said Skirven, from Senior Services, should take advantage of benefits including food stamps and discounts on energy bills and prescription costs.

It's also time to invoke the age-old pointers on thriftiness, he said.

"It's like, 'Grandma, heed your own advice,' " Skirven said. " 'Turn off the lights. Turn down the thermostat.' "

Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com