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Seniors Feel the Economic Pinch

How are you doing financially? Do you need a personal bail out, a personal "stimulus package" or might you soon? Never mind Wall Street--let's look at your street. To put in into perspective, consider the cost of living in the post-war recovery year of 1948 and in 2008, sixty years later. A gallon of gas: 16 cents vs. $4.00 today; a movie ticket: 60 cents vs. $5.00 today; a gallon of milk: 87 cents vs. $3.39 today; a dozen eggs: 23 cents vs. $3.29 today; loaf of bread: 14 cents vs. $3.50 today; a postage stamp: 3 cents vs. 42 cents today! Do your grand children believe those numbers?

In 1948, you spent under $10,000 for a HOME! Let's assume you have a home now, with no mortgage. In 2006, it might have been worth $300,000. Today, it might be worth $200,000. Where did that $100,000 go and how can you get it back? (Your kids might like to see it come back also.)

The Federal bailout might help the housing market reverse itself but it could take years before the value in your home returns to pre-crash days. The same for your other investments. If you have a reverse mortgage or home equity loans, it's time to discuss the real value of the home and the impact of those agreements on your financial strategy—assuming you can get through to your financial advisor. They are overwhelmed and their most common answer is, "I don't have a crystal ball!"

Lacking your own crystal ball, it could be time to go back to the mentality of the Depression years, and get even more frugal, more creative. Many seniors say they can't afford the taxes, maintenance, utilities, heating oil at $4.00+ a gallon. Despite the typical aversion to having strangers in your home, you might make a list of friends and relatives who could make tolerable housemates, especially if you live alone, should things get worse.

Cutting your expenses by one half might not be a bad idea. If it means keeping your home and living independently, the radical idea of sharing your home isn't farfetched. If you aren't ready to share your home, or move in with someone else, you might cut your heating costs by one third this winter with thorough "winterizing," with the help of a friend, neighbor or County program. Explore budget plans with utilities if you haven't already. Consider bulk grocery purchases with others. Dig out those recipes for whole wheat bread, meatloaf, vegetable soup...and what about canning several bushels of tomatoes and peaches?

The idea of working again isn't outlandish either. Many companies and non-profits value seniors highly, for their punctuality, reliability, ingenuity, and diligence. What you lack in speed, you can balance with positive attitude.

Social Security rules have changed so you no longer have to hide earnings to keep your benefits. If you can't take a roommate, work for pay or can peaches, maybe tell your kids it's time they bail YOU out for a change!

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