Four years ago I left Dallas on a motorcycle to travel along the U.S./Mexico border and report on what I saw. At the start, I gave readers my e-mail address and asked for suggestions. The result was amazing. Within days I had hundreds of e-mails. Two-thirds of the columns I wrote were the direct result of reader suggestions.
I call it 'reader-directed-reporting.'
This time I'm not on a motorcycle. I'll be traveling between Florida and California, with stops in Texas, New Mexico, Arizona, Mexico, and Nevada. I'll be driving a new 2004 Toyota Prius hybrid, trying to 'Drive-Lite' while searching for ways to Live Lite. I'll be visiting places where it is possible to live on less money, with an emphasis on RV parks.
This is not a whim. There is a reason for this trip.
Interest rates are low. Stock yields are low. Millions of Americans have retired early. Some have pensions. Most don't. Some have ample savings. Most don't. A nest egg that seemed generous a few years ago is embattled today. According to figures from the Social Security Administration, Social Security provides at least half of all income for nearly two-thirds of all retirees. It provides an incredible 82 percent of all income for forty percent of those 65 and over.
One message: decisions about savings and investments are secondary to most Americans. Decisions about how we live, where we live, and how we spend the incomes we have are more important than the price of mutual fund shares. It also tells me that virtually all of us will need to pay more attention to our life decisions than in the past because the struggle for retirement income is getting harder, not easier.
The most recent evidence comes from Alan Greenspan. Generally known as Chairman of the Federal Reserve, our nation's central bank, Mr. Greenspan recently assumed a new title.
He suggested that a long run of federal deficits would collide with future commitments to pay Social Security benefits.
His solution: maintain benefits for those already retired, or near retirement. Give lots of notice to those who will retire in the future. Then raise the retirement age and cut future benefits.
A media/political storm followed. Few remembered that this is exactly what Mr. Greenspan proposed 21 years ago. That was when the Greenspan Commission "saved" Social Security for at least 75 years. That was when the payroll tax was increased, the retirement age for full benefits was increased, and the taxation of Social Security benefits was initiated.
Today, he proposes to do much the same again. Basically, the financial beatings will continue until morale improves. Politicians of both ilks, being the disingenuous, manipulative wretches that they are, immediately disagreed.
Unfortunately, the Grinch speaks the truth. A collision is coming. There will be changes. Young or old, we won't like them. The very young can compensate for lower future benefits and a later retirement age by saving more and consuming less. That's not what anyone wants to do. It's also not what anyone is told to do: remember, the political response to 9/11 was not to tighten our belts. It was to strike back by going to the mall.
Those of us who are older have a choice. We can be hypnotized by finger pointing politicians. Or we can ignore their empty posturing. We can figure out what we personally can do to cope. We might just make a really "good best of the situation." We could invent a brand new future. What's most clear is that the time to plan and learn is now.
So how can you help?
Simple. There are pioneers out there. They are people who live differently and think differently. They are people who march to a different drummer. They are people who live on less money but feel wealthy--- if they think about such things at all. I believe most of them are entirely indistinguishable from ordinary human beings.
You may be one of them. Or you may know one of them.
Let me know. I'll do my best to spread the word and tell the story. You can reach me at firstname.lastname@example.org. You can also reach me at email@example.com.
Tuesday: A Floating Retirement On the web:
Installment Biker (Borderland and other motorcycle trip columns)
AP report on Greenspan's Speech suggesting Social Security benefit reductions
The Coming Generational Storm--- the on-line reader and MIT Press link to book:
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