Recession Tampers With Plans For The Golden Years

By Nancy K. Crevier

For senior citizens, the recession has been a mix of experiences. Some have lost huge amounts in retirement portfolios that had been intended to see them through their golden years. Others have remained on the job longer than originally planned, or gone back to work in order to meet cost of living increases or to maintain the standard of living to which they are accustomed. The pleasures of retirement are viewed with trepidation, with daily expenses sometimes cutting deeply into, or in some cases cutting out entirely, what seniors had hoped would be disposable income.

It is those older Americans who had planned to supplement Social Security income with a 401(k) or IRA plan that have suffered most from the recession, according to the “Impact of the Financial Crisis on Older Americans” report from the Association for the Advancement of Retired Persons (AARP).

For more than 20 years, Marge Costa has enjoyed living in Newtown. But as the recession drags on, Ms Costa, a senior citizen, is finding it harder to meet financial responsibilities that formerly were not a problem.

“Things are really bad since the recession,” said Ms Costa. For years she worked as a special police officer for the Town of Westport on an “as needed” basis, and easily worked 40-plus hours a week. “The need has changed, though, over the past four years, and I work part-time for Westport and another part-time job as animal control agent in Easton now. The two part-time jobs are not enough. I would work somewhere full-time, but I can’t find full-time work,” said Ms Costa.

A homeowner in Newtown and a member of the Sandy Hook Volunteer Fire and Rescue Company auxiliary, Ms Costa’s greatest worry this year is how she will pay her taxes. “It was difficult last year, but this year it’s really scary. Taxes were reasonable 20 years ago,” she said. She is frustrated in that she does not feel that the increased taxes have equaled increased services provided by the town.

The cost of living increases have forced her to change her lifestyle, said Ms Costa. She carefully plans each trip with her car, and has cut out any travel out of state, even to visit relatives. She now subscribes to just one magazine and only one newspaper. When she shops for groceries, she buys only the necessities and is much more discerning about her purchases. “I buy the store brands. Even with coupons, I can often get a better deal with the store brand. I’ve eliminated a lot of meat from my diet or buy only what is on sale now,” said Ms Costa. She has also cut way back on regular salon appointments, although she feels badly about that, knowing that it creates a cascading effect, with her hairdresser losing income.

She dropped her individual health plan and relies solely on Medicare now. Fortunately, she said, she is healthy and does not have a lot of prescriptions to fill. “But that doesn’t mean it won’t happen in the future,” she worried. “I feel like I’m running in place. I’m not gaining anything.”

Tax Relief

Ms Costa is not alone in her worries about increased property taxes in Newtown, said tax collector Carol Mahoney. “We’re hearing from the seniors that with taxes incrementally increasing, their level of concern increases as time goes by,” she said. But local and state programs in place to assist senior citizens have been “very, very helpful,” said Ms Mahoney.

Tiffany Wolfe is a tax collector in town, as well. A fair number of senior residents are aware of the tax relief program, she said, and do come in. “I think we are seeing more people applying for assistance for two reasons. First, because of the economy, and second, because we have increased the income limit making people eligible, from $60,000 to $65,000. Taxes are going up, but we want the seniors to stay here in town,” she emphasized. “Some have been here 40-plus years, and we want them to be able to stay here another 40 years,” Ms Wolfe said.

The Newtown Tax Relief For Seniors program applies to residents who are or have a spouse 65 years of age or older, and who have resided in and paid real estate taxes on a Newtown residence for at least one year. The property must be occupied more than 183 days each year by the taxpayer.

The tax credit, based on the taxpayer’s previous year’s total income, ranges from $1,300 to $2,000. The taxpayer must meet other criteria to qualify for the tax credit, and the tax collector’s office is happy to help residents determine if they are eligible.

The Newtown Assessor’s Office is also able to point senior citizens in the right direction for state programs that may help ease the tax burden, said Sheila Cole. A single person with an adjusted gross maximum income of $32,300, or a married person with an adjusted gross maximum income of $39,500, who is 65 years old or older, or who is 100 percent disabled, may qualify for a tax credit anywhere from $150 to $1,250, said Ms Cole, depending on the income.

There are also two tax programs for US military service veterans. Qualifying veterans may receive additional tax benefits from the state. Owners of any handicap vehicle are exempt from taxes by simply driving the vehicle to town hall and having the assessor confirm that it is a vehicle outfitted for use by a handicapped person.

Any one or any combination of the tax programs for which a resident is eligible can greatly decrease the amount of taxes owed the town, said Ms Cole. “It’s a simple application, and we do try to make every effort to help. We try to get people to be aware of all of the programs available,” she said.

Feeling The Squeeze

At the Newtown Senior Center on Riverside Road, director Marilyn Place said that seniors are mostly fearful that medical issues will mean that they will lose all that they have saved up for. Retirement plans for seniors are affected by how their immediate family members are bearing up during the recession, as well, she said. “Senior citizens are often finding that they need to help their extended family members. They don’t mind it, but it is not what they had planned for retirement. They travel less, and those who fall just above the limits to qualify for tax relief programs worry about taxes continuing to go up,” she said.

Having lived through the Great Depression, said Ms Place, seniors are relearning cost-cutting and going back to what they learned to survive then. And a few of the center members have gone back to work part-time, “just to make ends meet,” said Ms Place. “Nobody likes to have to make those adjustments, though,” she said.

Cy Dennerlein, Bea Piskura, Nicholas Piperis, and Frank Furze are Senior Center members who are very concerned about the recession. All of them said that they believe they fall just outside of the eligibility levels for most local and state assistance programs.

“The cost of whatever you do has gone up, but my income stays the same,” pointed out Mr Dennerlein. He tries to control food costs when shopping, and eats lunch each day at the Senior Center to save money. “I’m watching what I buy.” He worries, too, about increasing maintenance costs on his car, or what he would do if he needed a new one. “I worry about doctor care, too,” he said. “I have Medicare and veteran’s benefits, but I don’t have private insurance. I’m lucky, though. So far, I’ve stayed healthy, and I’m lucky to have a pension. A lot of young people don’t have that,” said Mr Dennerlein.

“Seniors are very concerned about Medicare and how the new health care plan will affect that, and how will we pay for our bills?” said Mr Piperis. A mismanaged pension has meant a huge financial loss for him, and his portfolio was also affected by the downturn in the market, leaving him in a lesser state of financial security than he had planned to be at this point in his life.

“I don’t go on vacations anymore,” said Mr Piperis, “and my wife and I don’t go out to dinner anymore. We compare all of the prices when we shop, and may even go to three different stores for better prices now.”

Mr Furze has switched from heating his home with oil to heating mostly with wood. “I do have a big pile of wood [from my property] that will last awhile,” he said, “and I’m still able to do most of the maintenance on my home.” He once relied on the interest he received from CDs (certificates of deposit) for the extras in life, “but not anymore,” he said. “They don’t pay anything anymore, and costs just keep going up.”

“I’m spending my ‘gift’ to my grandkids to get by,” lamented Ms Piskura. Without a cost of living increase in Social Security, she said, this past year has been a little more difficult.

 

Worrying About The Future

There is no hope of recouping lost income from recession-damaged portfolios and mismanaged accounts, said the four senior citizens, and while they are not suffering as much as some others that they know, they worry about the future. They are regretful that the change in the economy means that retirement is not quite what they had once envisioned.

“Things are not getting better and it will be a long time before it’s better,” said Mr Piperis. “But I make out as well as I can with what there is. What else can you do?” he asked.

George Stockwell of Newtown said that personally and in his volunteer position at an assisted living facility, he has not seen the recession take a toll. “The people at the facility pay a fee, they don’t do much grocery shopping, they are pretty much taken care of. The quality of life there has not been affected, from what I’ve seen,” said Mr Stockwell.

A retired teacher, Mr Stockwell said that he and his wife, a CPA, have had to make few changes to their lifestyle. “The recession hasn’t affected our ability to do what we had planned to do at this point. We have chosen to put some travel plans on hold, but we will probably pick that up again this fall. But,” he added, “I don’t think our situation is typical.”

State programs have increased the limits of eligibility in many cases, said Ann Piccini, director of Social Services in Newtown. “Some people who own their homes are afraid to apply for any help, fearing that their homes will be taken. But that’s not the case,” assured Ms Piccini.

Assistance

Based on income levels, assistance for the elderly is available in the form of food stamps, tax reductions, fuel assistance, and help in paying for prescriptions. “We have a town food pantry here [in the South Main Street facility] and all you have to do is provide proof that you live in Newtown. And there is the FAITH Food Pantry, as well, in St John’s Episcopal Church,” said Ms Piccini. Understanding that many elderly have never had to ask for assistance before and may be embarrassed to use the food pantries, Ms Piccini said that private visits can be set up for shopping if a resident in need feels uncomfortable.

ConnPACE offers medical assistance for a $45 annual fee to eligible Connecticut residents. “It pays the monthly charge for the Medicare Part D Prescription Drug Plan, and the recipients never pay more than $16.25 for a prescription once they are enrolled,” explained Ms Piccini.

A fair amount of documentation is required for the Connecticut Energy Assistance Program, Ms Piccini said, but once it is in place, heating bills can be minimized.

“I think more people are eligible for assistance than are applying,” said Ms Piccini.

“But overall, for very low income households, the recession has actually benefited them, with increased assistance available now. So the cost of living is stable or better for them,” she said.

For information regarding the local and state programs, contact the Social Service office at 203-270-4330.

Applications for Tax Relief for Seniors are accepted at the Tax Collector’s Office or the Assessor’s Office through May 14. Applications will also be accepted at the Newtown Senior Citizen Center on Riverside Road in Sandy Hook, March 11, and 25, and April 8, from 9 am to noon; and April 22, from 1 to 4 pm. For further information, call the Tax Collector’s Office at 203-270-4320, Monday through Friday, between 8 am and 4:30 pm.