No, you should not be rude in return, because two wrongs can't make a right. It is never polite to be rude.
I think if someone is rude you should be rude to unless you think their just having a bad day.=}
You don't always have to rude, you should respect your elders. They have gone through a lot in their life and she is probably not happy that she still alive. Maybe her late husband passed away and she takes her anger on everyone else. You should just try to understand, ignore her or tell her politely that she doesn't have to be so mean to you.
As people age, nerve connections in their brains deteriorate and that has the effect of removing tact and discretion. A very old person might say something that she would not have dreamed of saying a few years before. You can't in fairness penalise someone for something beyond their physical abilities. Nobody gets upset about a baby being incontinent because people know that babies do not have the physical ability to be clean and continent.
If you believe that the person who was rude has not yet started with age related deterioration of nerve connections, replying with exquisite politeness may remind her of her own manners.
You could say "I'm sorry - have I done something to offend you?" In this way you will show that you have class and that you are open to their feelings.
You might better ask yourself why you would want to be rude to anyone? What would you get out of it? It would not make you a better person
I don't think it matters.
She is old as you say; she may be unwell and unhappy. Try to forget about it. Allow your compassionate and spiritual nature to develop. Carry goodness in your heart not hardness. Apart from anything else, it is an easier way to live with yourself.
