The temperature in Lea Wait's home has been falling along with stock prices.
Wait, 61, invested the early retirement buyout she took from AT&T Corp. in 1998. As stocks gyrated this winter and the heating bill at her Maine home climbed to $600 a month, she made new investments: thermal underwear and a wood stove that burns "BioBricks" made of condensed sawdust and wood chips.
"You try to do some planning," Wait said. "Then the stock market goes down and oil goes up. Fingers crossed that it will be an early spring."
Rising food and fuel prices, falling interest rates and screeching declines in worldwide stock markets have Wait and thousands of other retirees paring spending to levels some haven't seen in decades, forgoing dinners out, cutting back on groceries and canceling plans to visit grandchildren.
"All these costs are added up, but when I get my Social Security check, it's the same thing," said Johanna Walker, 75, of Greenfield, Wis., a retired receptionist who said she depends on Social Security.
As a group, retirees are wealthy. People 65 and older have an aggregate net worth -- assets such as homes, cars, stocks and savings accounts minus liabilities such as debts -- of $14.45 trillion. That's more than one-quarter of the nation's personal net worth, according to an analysis of the most recent data from the Federal Reserve-sponsored Survey of Consumer Finances.
But a closer look shows life in retirement isn't all cocktails at the country club. The median income of people 65 and older in 2006 was $16,443, according to the Employee Benefit Research Institute, an independent nonprofit group.
Social Security accounted for roughly 40 percent of average income for people 65 and older, according to the institute, while wages and salary earned by those who kept working were about a quarter of average income. The rest came from pensions, annuities and assets.
Wait, for instance, depends on income from investments and earnings from the mystery and young-adult novels she writes, paintings her husband sells and a small antique business they run.
In Harlem, retired waiter Alexander Saunders, 69, said increased medical costs have him job hunting; he's waiting for his fingerprints to come back from a background check so he can get his chauffeur's license, start driving a limo and work his way up to driving a cab. Asked what he's doing to cut costs, Saunders, who has diabetes, reaches into his coat pocket to pull out packs of Splenda nipped from restaurants.
After spending 40 years waiting tables everywhere from the Waldorf-Astoria to Lundy's, "I just have to really budget," said Saunders, who said his monthly income from Social Security and a pension is $680.
Financial advisers say retirees with assets should spend, as a general rule, only 4 percent of their investments each year in retirement. But larger outlays are sometimes unavoidable.
Ed Block, 81, has seen a series of expenses drain his savings in the 22 years since he retired from AT&T and moved to Key West, Fla.
He and his wife helped with two granddaughters' college bills and contribute to one grandson's prep school expenses. They've started a college fund for the rest of their grandchildren, assisted two sons who were downsized and pitched in when a grandchild needed special education.
With his diminished investments and a pension that doesn't rise with inflation, what Block calls "Wall Street's agonies" added urgency to 2008 budget cuts the couple would have had to make anyway, he said.
"Twenty-two years without a paycheck is a very long time in the face of persistently rising costs," he said.
Block and his wife have shrunk what used to be $2,000 to $5,000 annual donations to symphony, church and social service agencies to $150 to $300. Vacations are out. When homeowners' insurance hit $1,200 a month, the couple trimmed their coverage.
The Blocks gave their Acura and their Mini Cooper to two of their sons, downsizing to a four-cylinder Accord.
Recent stock market tumbles mean their savings "are further threatened," he said. "At my age, I have no prospect of enlarging our income through employment, so we are just going to have to turn the screws and tough it out more than we even had to do since I began my working career in 1950."
On the other side are investors such as Trudy Aman, 76, of Hollywood, Fla., who has run a stock club for 12 years and sees market swoons as a buying opportunity. One of the stocks she owns is Garmin Ltd., the global positioning system company. When it hit $123, "I was just hysterical," she said. When it dropped to $60, a friend called and said, "What do you think, are you going to sell?"
"I have full faith in this country's economy," she said. "I wouldn't dream of selling."
She told the retired teachers and city of Hollywood employees in her stock club when she founded it, "This money is not to put bread and butter on the table. This is money, if you lost it, you wouldn't be out on the street. I do not buy anything unless I have extra money."