January 11, 2011
Pinched by the Economy, Older Adults Put Themselves at Risk
The economic slowdown continues to take a toll on the lives of older adults. For the second year in a row, there is no Cost of Living Adjustment (COLA) to boost Social Security benefits, according to the Senior Citizens League (TSCL).
Local senior-care experts warn families to be on alert to make sure seniors aren't being impacted too severely. Warning signs include skipping medications, pulling the plug on air conditioning and canceling social outings.
Rising Medicare premiums are expected to shrink the Social Security benefits of an estimated 25 million seniors, the organization said. "If that isn't bad enough, when rising cost-sharing and coverage changes are added, some of the oldest and sickest seniors may find they need as much as half of their Social Security benefits just to cover healthcare costs in 2011," says TSCL Chairman, Larry Hyland. "And this could become our new norm in the near future," he noted.1
This situation could easily create a ripple effect for seniors. "Cuts of essential items such as food and medication should be of immediate concern to seniors' families," said Jeff Huber, President and Chief Operating Officer of the Home Instead Senior Care® network.
"Other reductions in spending can lead to less obvious issues. One of the biggest problems that we see is senior isolation, which has been magnified during this troubled time in our economy with travel expenses and less money for leisure," Huber added.
"When seniors' families live a distance from their loved ones, or when Boomer children are busy trying to make ends meet themselves, an older adult can get in trouble very quickly. That's why it's so important that someone look out for the well-being of seniors to ensure they are safe in their homes and eating properly, taking their medications and able to maintain their appointments and social life," Huber said.
Fluctuating interest rates, fixed incomes and seniors' fears of past hardships can influence how they react to the current economic slowdown, according to Sheryl Garrett, CFP®, author of Personal Finance Workbook For Dummies® and several other books on financial planning. "Some seniors may be running short on money but, for others, there's always that fear of running out because they lived through the Depression. They know how ugly it can get."
It's important also for seniors to guard against fraud and too-good-to-be-true offers, Garrett advises. "Seniors want to get the best that they can from their investments without falling for scams or overselling tactics," she said.
Older adults also should beware of CDs and fixed annuities that can promise higher interest rates, but force seniors to lock in their money for longer time periods or otherwise put their investments at risk, Garrett noted. Always get a second opinion, Garrett advises.
"Seniors at all income levels may be facing choices they haven't had to make in the past," Huber said. "They should know where to go for help before they put themselves or their health at risk. Area Agencies on Aging, for instance, offer both food and gas assistance, so seniors should contact their local offices if they can't make ends meet. And companies such as Home Instead Senior Care can provide transportation assistance and help around the home, and serve as a second set of eyes for seniors' families."
Families also can play an important role monitoring seniors who have decided to scale back because of the economy. Even seemingly innocent decisions, like cutting back a little on groceries or air conditioning, can have a damaging impact.
1.Shrinking Social Security Checks – New Norm for Retirees? http://www.seniorsleague.org/index.php?option=com_content&task=view&id=3625&Itemid=49
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