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Related topics: retirement, retirement planning, Social Security, pension, retirement savings

Imogene Goss likes to walk around a lake that is six or seven miles from her home in Kansas City, Mo. It's less hilly than her suburban neighborhood, with no cars to navigate around.

But when Goss, 80, a retired postmaster, calculated that driving to the lake was costing her $5 a week, she brought her exercise routine back home. With gas flirting with $4 per gallon, she also is careful to group her errands. "I have learned very careful driving habits in the last few years," she says.

Rising prices for food, gasoline and health care are hitting older Americans hard. The last cost-of-living increase for Social Security recipients and federal retirees was in 2009, and retirees on fixed incomes are seeking ways to economize as prices of essential goods rise while their incomes remain static.

"Seniors are finding it harder and harder to get by with just their retirements," said Melissa R. Tribelhorn, who works in Seattle for the nonprofit Senior Services, which connects older people with services ranging from transportation to legal aid. "We're seeing a pretty large influx of clients needing our services where a year ago they wouldn't have needed us."

Financial setbacks

Twenty-three percent of people 65 and older live in households that depend on Social Security for 90% or more of their income, according to a 2010 AARP report (.pdf file). About 26% more receive at least half of their family income from Social Security. Among women, 53% of those 65 and older depend on Social Security for more than half of their income.

An increase in the amount that retirees contribute toward Medicare premiums is likely to wipe out next year's Social Security cost-of-living increase for most recipients.

Retirees also are coping with investment losses and, in some areas, reductions of 50% or more in the value of their homes. That ends their plans to sell the big family home, buy a smaller retirement home and add the rest of the profit to retirement nest eggs. Some won't see the lost equity come back in their lifetimes.

While the standard advice to those who have lost retirement savings is to work longer, many older people who would like to work can't get jobs. The unemployment rate for men 62 and older rose from 3.3% in 2007 to 7.3% in 2010, according to research from the Urban Land Institute. The rate for women 62 and older rose to 6%, double the rate in 2007. Rather than working longer, some older people have been forced to retire early.

The cost of staying healthy

Although all Americans 65 or over are eligible for Medicare, all but the poorest pay a premium that comes out of their Social Security. Basic Medicare doesn't cover expenses such as dental care and prescription drugs, and policies that cover those gaps cost extra.

Bettye Guillory of Federal Way, Wash., near Seattle, has managed to live to 98 so far in relatively good health. To stay healthy, she spends $89.85 every other month on vitamins and supplements such as glucosamine for joint health. She can't afford those vitamins without help from her daughters, who are old enough to retire though both still work.

Guillory's sole income is $1,354 a month from Social Security. Of that, she pays $1,105 a month for room and board in an adult family home (Medicare pays the rest) and about $185 a month for health insurance. That leaves her less than $65 a month for other expenses.

"Everything goes up," she says. "The Social Security used to give me a little more every year."

With less than $65 a month to spend, she can't buy the fresh fruits and vegetables, real orange juice, green tea and organic eggs she'd like to have to supplement the food that's served at her retirement home.

"I'd like to have healthy food to eat," Guillory says. "They give you food that's not really all that healthy. . . . They use the eggs that come in boxes instead of real eggs."

Guillory is grateful to receive rides to the doctor's office from volunteers with Senior Services, which suggests paying the volunteers $3 a trip. Even that is beyond her, she says.

She worked until she was 89, managing a cosmetology examining service after a long career as a cosmetologist, hairdresser and the first woman of color named to the Washington state Cosmetology Board.

She published her first book, about her interracial family, two years ago and is working on her second, an autobiography. "I'm thankful to God that I have a young mind," she says.

Finding places to cut

Imogene Goss, the Kansas City resident, says she considers herself lucky to be in good health, with minimal health-care expenses." (Her city of residence is mentioned at the beginning of the story, but that detail is easily forgotten, and it's highly pertinent to the discussion of her situation.) Her retiree benefits include health insurance. "I don't know how someone would get by" if they had significant health-care expenses, she says.

Goss worked for the U.S. Postal Service, finishing her career as the postmaster of Canton, Mo., before retiring at 61 to take care of her 94-year-old mother. She gets $2,059 a month from Social Security and her pension. Her house is paid for, but she is paying $700 a month toward a loan she took out for much-needed repairs a few years ago.

Goss' income covers her basic expenses, but she has had to cut back on travel. She used to visit her son in St. Louis three or four times a year. Now she goes just once. She hasn't made what was once was an annual trip to Texas to visit her niece for several years.

She drives a 1996 Oldsmobile with 180,000 miles on it, which she hopes will keep running another year, noting she got 200,000 miles out of her last car.

Places to find help

The National Council on Aging recently launched a campaign called One Away to draw attention to the struggles of older Americans, noting that many seniors are just one unexpected event away from financial crisis. The One Away website shares stories of seniors.

"I bought a retirement home just before the mortgage meltdown, with intentions of selling my home and moving as soon as I retired. At 65, having worked very hard since I was 9 years old, I lost everything, including both houses and my retirement income. I am currently filing for bankruptcy and I don't know where I will live when it's all done," writes Lynette of Globe, Ariz.

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The council's online clearinghouse offers links to information on finding jobs, getting access to benefits, finding senior centers and getting help with medical care.

AARP's website also offers tips on looking for jobs and links to resources, advice and benefits.

Used to frugal living

Judy Kay, 81, is philosophical about living a frugal life.

Her sole source of income is $1,303 a month from Social Security, and she pays $580 a month to rent an apartment near Fort Lauderdale, Fla. She says she considers herself lucky that her community provides shuttle service to nearby stores for 25 cents a trip.

She retired about 10 years ago from her office and computer job. If she had a little more money, she says, she could consider shopping somewhere besides the Dollar Store.

"Prices are high on food and so forth, so naturally it's going to be hard for me," she says. "Things have been tough."