Lindsey had been the family's chief breadwinner for some 15 years -- dating back to when her husband was slowed down by a stroke and continuing through a decade of widowhood. But when Lindsey turned 65, she decided to retire with a small pension from First Virginia Bank.

It wasn't long, however, before she found that she "really couldn't make ends meet," and so Lindsey rejoined the work force on a part-time basis. She worked 6 years for a firm handling real-estate taxes before leaving on account of illness.

Now 73, Lindsey has once again reentered the labor force, this time through a job-training program for older workers at which she learned WordPerfect, a computer software program. She works 25 hours a week as an administrative assistant for employment programs at the Fairfax Area Agency on Aging.

Lindsey has come to the realization that, barring any permanent illness, she will never retire for good. "I will have to continue to work because of escalating prices," she notes.

Or, as a 77-year old woman whose work Lindsey monitors says, "I plan to stay right here until I fall dead on the job."

And that's the case with more and more Washington-area seniors who are finding that a fixed income -- typically consisting of a pension, Social Security, and possibly interest on investments -- doesn't stretch far enough.

Marion Jacknow, coordinator of Older Worker Job Training Programs for Fairfax County, notes "a tremendous increase in people needing to reenter the work force." The waiting list for the programs she administers includes more than 130 names for 27 slots.

Although Americans eagerly await retirement, the reality is that many simply can't afford it. The U.S. Census Bureau reports that the average individual income from all sources for persons 65 and older is just $12,300 -- hardly a king's ransom.

A national poll of 400 adults ages 45 to 64, conducted last fall by the Wirthlin Group for Money Magazine, found that eight out of 10 people questioned do look forward to retirement. But only 24 percent said they were highly confident of maintaining a comfortable standard of living in retirement.

Fully 45 percent said they are afraid they will outlive their money, and 69 percent foresee a risk of being overwhelmed by health-care costs. One out of four reported saving nothing at all toward retirement.

To determine whether they need to keep working, seniors first need to review their income sources, says Barbara Hughes, who manages the Women's Financial Information Program of the American Association of Retired Persons (AARP).

Possible sources include: Social Security; pensions; the interest and other earnings from savings; equity in a home; various assistance programs, such as energy, food, and transportation; and full or part-time jobs.

Indeed, many seniors do continue working. According the Bureau of Labor Statistics, 55 percent of the men ages 60 to 64 and 36 percent of the women in that age group were working or looking for work last year.

For ages 65 to 69, 26 percent of men and 16 percent of women were in the labor force.

Even among persons ages 70 and over, 11 percent of men and 5 percent of women continued to work.

Most seniors, though, rely on a variety of income sources.

According to the U.S. Census Bureau, Social Security accounts for 41 percent of the income received by persons ages 65 and over in 1987, the most recent year for which these data are available.

Other retirement income -- pensions and annuities -- account for another 17 percent. Earnings from work -- wages, salaries and self-employment income -- amounted to nearly 16 percent of total income.

Most of the remaining income -- about 24 percent of the total -- was what is called "property income," that is, interest, dividends, rents and royalties.

Indeed, the trick to living on a fixed income has two components.

The first is stretching income by making spending cuts. The second, which focuses on property income, involves making the "fixed" income grow through investments.

Otherwise both inflation and unexpected expenses can create a virtually unpluggable money leak.

Plugging the leaks

In its free publication entitled "Planning Your Retirement," the AARP suggests ways to make spending cuts. Retirees are advised to see how much they are spending in each of the following areas and determine where cuts are possible:

Housing. Compare the cost of new retirement housing with the cost of maintaining or renovating your current housing to make it suitable for retirement. Consider taking in a roomer to share expenses.

Medical and dental expenses. Medicare covers less than half of expenses. Investigate supplemental health coverage and Health Maintenance Organizations.

Other insurance. Continue automobile, home, personal property, and public liability insurance. Determine whether your circumstances warrant the continuation of life insurance.

Transportation. Consider the savings from maintaining only one car instead of two and see if public transportation can fill most of your needs.

Food, clothing, personal items. Look for ways to save with discount coupons, generic brands, sales, and buying in bulk with family or friends.

Travel, entertainment, hobbies. Look for savings on off-hours dining and out-of-season travel. Inquire about senior citizen discounts for travel, accommodations, and entertainment.

Gift giving. Consider substituting your time and personal services for monetary gifts. Set guidelines for giving and loaning money and change your plans if these expenses cut into your basic needs.

On this point, Barbara Hughes, manager of the women's financial information program of the AARP, reminds seniors that a loan is a business contract. "Parents are susceptible to slipping children some money," she observes.

But all loans should include an agreement on the amount, any interest payments, how it is to be paid back, and when final payment is due.

And if, after taking these precautions, the lender still doesn't get reimbursed, no more should be loaned to this party, child or not.

Even seniors who think they have plenty of cash available to spend or give away should note the warning of Caroline Valentine, director of the Fairfax County Financial Education Center, a human services agency.

"If seniors relinquish their cash, what are they going to have in their eighties and nineties?" she asks.

Valentine notes that people who in mid-life have "multifamily responsibilities," which means providing support for both adult children and aging seniors, may have few resources left once reaching their own retirement years.

Medical costs

Ill health often makes the difference between retiring comfortably and running out of all resources.

Lindsey, whose husband spent his last four years in a nursing home following a severe stroke, says from experience that "the best laid plans and all the savings a family has can be wiped out in a few years of nursing home care."

To help seniors determine what kinds of health care insurance is most appropriate expenses, United Seniors Health Cooperative, a Washington-based nonprofit consumer organization, provides health insurance counseling.

According to Jim Firman, president of the organization, about one out of four seniors pays for overlapping health insurance coverage. At the same time, no more than about 3 percent of seniors have coverage for nursing home or long-term care, he reports.

Moreover, Firman has found that a significant proportion of seniors have not applied for the health benefits to which they are entitled.

Working in conjunction with area agencies on aging, United Seniors runs a computerized program to check eligibility for 45 local and federal entitlement programs.

Annual membership, which costs $10, includes information to help seniors decide among various insurance plans as well as the benefits eligibility service and a bimonthly newsletter on money and health issues.

Saving and investing

Putting savings into an interest-bearing account goes at least part of the way toward keeping up with inflation. If $10,000 is invested at 7 percent interest compounded quarterly, a $116 monthly withdrawal will deplete the account within 10 years; a $70 monthly withdrawal will stretch the account over 25 years. With a $59 monthly withdrawal, the savings will last indefinitely since only the interest gets withdrawn.

Many investors, however, recommend that seniors supplement their fixed income with income from investments. This is done by putting your money to work either by lending or buying.

Lending your money means putting it to work in the money market.

Ways to do this include purchasing U.S. Treasury and agency securities, including U.S. Savings Bonds; corporate bonds; municipal securities; certificates of deposit (CD's); money market accounts; and annuities from insurance companies or other financial institutions.

Using your money to buy something which you may be able to sell at a higher price are generally higher-risk ventures. You may purchase stocks, which also may generate income through dividends, or buy mutual funds, real estate, metals, gems, or collectibles.

But while financial planners often note that seniors, like other investors, "can't be comfortable just being safe," seniors often cannot afford to risk anything.

"We're assailed by good advice, but who's got the money to invest?" asks Lindsey. And she's not alone.

AARP's Barbara Hughes says that "most people can afford to lose next to nothing."

Choosing to maximize savings "sounds easy to do, but if you can't risk anything, you need to stick with safe investments," says Hughes. She suggests, for example, CD's from federally insured institutions.

AARP recommends you start reading about investments in the light-hearted, practical guide, "(Still!) The Only Investment Guide You'll Ever Need," by Andrew Tobias (1987, Bantam, $4.50).

Because Americans today are living longer, planning how to afford to live has become even more crucial. And the planning really never ends.

As Valentine observes, "We never get to the point where we can say, 'We don't have to do any more planning.' "

The proportion of individual income from various sources for persons ages 65 and over:

Social Security, 40.5 percent.

Property income (interest, dividends, rents, royalties), 24.0 percent.Pensions and annuities, 17.4 percent.

Earnings (salary, wages and self-employed earnings), 15.5 percent.Supplemental Security Income and public assistance, 1.4 percent.

Other sources (alimony, gifts, veterans payments, etc.), 1.2 percent.Source: 1987 Current Population Survey, U.S. Bureau of the Census

For information on the United Seniors Health Cooperative, call 202-393-6222 or write, 1331 H St. NW, Suite 500, Washington, D.C. 20005.

Publications available from the organization include: "Finances Over 50," "Long-term Care: A Dollars and Cents Guide" and, "Managing Your Health Finances."

For information on joining the American Association of Retired Persons, call 202-872-4700 or write, AARP, 1901 K St. NW, Washington, D.C., 20049. Among the many publications available from AARP on this topic are: "A Primer on Financial Management" (Order No. D13183) and, "Planning Your Retirement" (Order No. D12322).