According to the Census Bureau, nearly 24% of residents in Saratoga are 65 years or older, most of whom are retired. Despite the city’s reputation for wealth, elderly residents have seen their pocketbooks hurt by the inflation that has led to consumer prices rising by 9.1% in the past year.
Many senior citizens’ financial struggles can be attributed to living off of a fixed income as prices for gas, food and other items skyrocket. While a majority receive retirement income such as Social Security or pensions, this income often fails to keep pace with inflation. They generally also experience decreased mobility due to age and have less time to recover from economic disruptions in the long run, factors that hinder many from working to support themselves.
Inflation: ‘Then’ vs. ‘Now’
For many seniors, the recent “outrageous” and “absurd” rise in prices — particularly gasoline, which hit over $6 per gallon in June and again recently — hasn’t been their first run-in with high fuel costs.
“People generally haven’t thought about placing the content of seniors’ comments in the context of the 1970s,” said Jim Foley, 75, who has resided in Saratoga since its founding in 1956 and has family who owned property in the area long before then.
Back then, the cost of crude oil spiked from $3 per barrel to $12, primarily due to the oil embargo by the Organization of Petroleum Exporting Countries (OPEC). In fact, the situation was so extreme that the Nixon administration began a policy of price and wage controls.
“The offset in the 1970s was not as dire as it is to me now because I was getting raises in my job,” Foley said. “Now with retirement, I’m locked in and inflation can outstrip my ability to keep up.”
Unlike many seniors, Foley still earns a small income by working in consulting, so he has felt a smaller economic impact from the rising gas prices than other local retirees he knows who have experienced “drastic” decreases in mobility and the sacrifices that come with it. Both younger and older demographics inconvenienced by pricier gasoline have resorted to driving less to keep costs down, but this particularly harms older populations who are more prone to isolation, a public health risk among the most dangerous worldwide for seniors because of its potential to increase the risk of chronic illness, dementia and other serious conditions, according to a report by the Center of Disease Control and Prevention.
For some local seniors interviewed by The Falcon, the economic changes posed by inflation have been relatively harmless, like canceling an outing to Tahoe or choosing to eat at home over restaurant dining. But for others, inflation has forced them to cancel a monthly visit to their grandchildren or postpone a doctor’s visit.
Foley said the high average house price, which is currently $3.7 million, and the stereotype of Saratoga as an upper-class Silicon Valley suburb belies how many seniors still struggle monetarily because they bought into the area decades ago, when prices were low until the “newer residents drove up prices after hitting the jackpot in the high-tech industry.”
This sentiment has caused increasing frustration for longtime Saratoga residents like Michelle Jackson and her family, who moved in generations before “big tech came in and the small town vibe became a metropolis.”
Citing her late grandparents’ grit after surviving the Great Depression, Jackson said she believes that even they would find the current high prices of food and gas daunting. Her mother, who is still alive, has also struggled immensely amid the recent inflation.
“It’s hard seeing my mom trying to adapt to the recent events and feeling left out, especially because she has trouble with technology,” Jackson said. “We are overworked from trying to keep up with all these changes and everything is overpriced — I’m over it.”
Inflation’s impact varies among seniors
Some Saratoga seniors find themselves to be financially comfortable, having been successful in their youth and extremely mindful when saving for retirement.
For example, 83-year-old Bob Baratta-Lorton, an SHS parent of two Class of 2001 alumni and former teacher who now “teaches other school teachers,” said that “inflation has not affected [him] at all.” A large reason has to do with the fact that he has already paid off his home, which was bought in 1971 for $42,000, and also has lower property taxes due to California’s Proposition 13, a measure adopted by California voters in 1978 which restricts the property tax rate to increase by no more than 2% per year. Additionally, solar panels at his house reduce the monthly cost of electricity from $500 to almost nothing.
On average, Baratta-Lorton receives $2,700 per month from Social Security and spends $1,700 on basic expenditures including health coverage, electricity, data plans, TV streaming services, groceries, gas and other miscellaneous spending, leaving him with approximately $900 above Social Security alone.
Because Baratta-Lorton’s Toyota Prius only requires filling every other month, rising gasoline has little impact for him. All these factors contribute to lower monthly expenses for Baratta-Lorton, which has shielded him from the impacts of inflation.
In the middle of the wealth spectrum, other seniors like former SHS cross country coach Danny Moon have felt the stress of inflation like others, but not to the point where it’s affected their day-to-day lives.
“My wife Madelyn and I are very fortunate to be members of Kaiser’s health insurance program along with Medicare [a government health plan for those above 65],” Moon said. “But we’ve noticed a big increase in spending since we buy food for ourselves, our son Michael and my mother.”
Moon acknowledged that he doesn’t make purchases or travel with the same ease of thought as the “young people [in the area] working with Apple, Google and the like.” However, he and his family can still make a conscious effort to visit local restaurants and small businesses to support them.
He partly attributes this flexibility today to the savings he and his wife focused on when they were younger; anytime Moon or his wife received a raise, they would immediately put the excess money into retirement savings. Since both worked at large corporations — he was an employee at a large aerospace company, Lockheed Martin, and his wife worked at General Electric — they both had the opportunity to invest in their respective company’s fixed pension plans.
Even with the limitations of living off a retirement fund, Moon said he is much more prepared to deal with current inflation because he experienced the 1970s inflation.
“We were fortunate to survive then,” Moon said. “During the gas shortage in my 30s, it was definitely harder for me then than it is now. Back then, it wasn’t paycheck to paycheck. It was paycheck to savings. Now we’re taking savings to live. I’m also more responsible about maintaining a sustainable living style.”
Yet even within families, economic circumstances vary.
While Moon, his wife and their son are relatively well-off, Moon said his 94-year-old mother, who started drawing from Social Security at 65, wouldn’t be able to survive the recent inflation without their help.
“She is greatly affected because she has low [income] security, something that many people in her age category have a real problem with,” he said.
Back when she was working, Moon’s mom made “good money in those times” — around $9 an hour, or $105 adjusted for inflation. However, since Social Security is based on pre-retirement income and lifetime earnings, Moon’s mom now receives only $750 per month. With over three decades of continuous inflation and drawing from her Social Security, her living expenses are much higher than her income.
“The only way I can keep her thinking she’s within her means is to take away the payments that come. Otherwise, she’d be real depressed and want to get out of there, since she lives in her own home,” Moon said. “A lot of older people that live in Saratoga — I would estimate 20 to 30% — are on low security. They’re the ones that really get affected.”
The bigger picture
Incoming Saratoga retirement home residents face the additional issue of affording housing costs in a dropping housing market.
One senior is a 75-year-old resident and retired middle school teacher, who asked to remain anonymous. He moved to Cupertino in the 1970s with his wife and was attracted to the Saratoga Retirement Community (SRC)’s various residency types — including apartment, cottage and assisted living — and services like meal planning, medical care, housekeeping and scheduled transportation.
However, the SRC charges a monthly fee of up to $9,221 for a two-bedroom apartment — seven times the average $1,295 monthly two-bedroom apartment rent in the U.S. — as well as an initial buy-in cost of up to $1 million, forcing the couple to sell their house to afford the next 30 years of retirement.
The couple signed a contract with the SRC in May, but the housing market spiraled immediately following their contract: Average housing prices in the San Jose metro area fell over 4% more than those nationwide.
“Now, we’re sitting in a limbo, waiting for our house to sell. If it doesn’t, we won’t be able to move,” he said.
Despite his and his wife’s current predicament, he is most worried for other seniors facing inflation that “is taking away what little sustenance they have,” both inside and outside of the nearby Saratoga and Cupertino demographics.
“In our area, we’re lucky that there are very few people who are not able to get by with the income that they have,” the resident said. “Unfortunately, we also know others who have come from other countries and are struggling really badly. It’s so hard for them to get a break.”
One of his acquaintances — whom he supported in the process of obtaining their Green Card and in immigration court — has barely gotten by with their wife and kids.
“He’s the epitome of a hardworking person. Without inflation, life would be a lot different for his family,” the senior resident said.
Citing the lack of action from politicians, he believes that there is little governmental support for the people who are drastically impacted by inflation, leaving the general public to take charge.
“The question is, what is everybody doing for them? You don’t see a big groundswell of, ‘oh, let’s get together and help these struggling people out,’” he said. “In our country, there are people who really don’t have enough to get by, and I think that’s where the focus needs to be.”
