One of the most important questions each of us must deal with is how to prepare for old age. In America, the standard answer is to work hard all your life so you have a pension (or savings such as a stock portfolio, 401k or IRA) and Social Security waiting for you. The idea is that you have the best possible life you can now, but you make any required sacrifices of the best part of your life while you are young and healthy so that you will have a comfortable and secure old-age.
Basically, there are two radically different ways to look at the future and which you choose will profoundly determine your quality of life now and in the future.
1) Live for Tomorrow and Sacrifice Today:
I bought into that idea and that is exactly what I did. I got a job with Safeway grocery stores the day I turned 16 (as a bagger) and kept working for them until I worked my up to a Journeyman Clerk. I worked for them for a long time but came and went as I pursued other dreams. When I got married I went back to them because I needed a good-paying job with good benefits and a secure future. I worked for them for the next 24 years (every minute of which I hated). Because it was a Union job, all my time with them counted toward my retirement plan, which was very good! In 2006 I took early retirement at 51 and had a pension of $1100 a month. Not bad for such a young guy! That isn’t typical of course, most pension plans require you to work until you are much older to be able to draw; sixty is pretty common.
Having children does make you do more planning for the future, but it doesn’t have to mean you can’t live for today at all. I totally believe that the best thing you can do for your chIldren is to set an example of a happy person living a life of freedom and joy. It won’t be easy, but you can do it.
2) Live for Today and Sacrifice Tomorrow
Now compare that to my friend Venture, who just gave us the reports on thru-hiking the Colorado Trail http://cheaprvliving.com/blog/have-adventures-when-you-are-young/. He is 34 and has made the deliberate decision that he will not plan for his old-age, instead he is going to live his life to the fullest right now when he is young and healthy, his old-age be dammed!! He is “front-loading” his life with freedom, adventure and fun while he is young instead of waiting until his body is old and broke-down. He plans to work jobs just until he is able to save the money he needs for his next adventure, then quit. After that adventure is over he will get another job, work and save just long enough to have enough money for the next adventure, and then he is off!!
In this post I want to explore those two models and share my thoughts on which I prefer. As I do, it’s important you understand that I am not passing judgment: neither is right or wrong, just different. All I want to do is explain the issues and explore the options. Your conclusions may be totally different from mine, and that is fine with me.
THE WORST CASE
Both sides will cite the most dire possibilities about the other to prove why their decision was right, so let’s explore them:
1) First we will look at the worst case for Living For the Future:
- The typical American life of living for the future is full of physical, mental and emotional stress. Many studies have shown that the accumulated stress causes a great deal of the diseases that are plaguing our modern lives like: depression, drug and alcohol addiction, cancer, diabetes and heart disease. Living for the future is slowly killing you today!
- You can live for tomorrow by working at a job you don’t like for 40 years and then die or suffer very bad health at 60. That is exact what happened to my father. He worked as a Safeway Store Manager all his life and retired at 60 financially secure for the rest of his life. His personality changed overnight going from a unhappy, stressed person to a relaxed and pleasant guy. At 61 he was diagnosed with cancer and was dead at 62. His example made it very clear that I would not follow in his footsteps.
- In an era of minimum wage jobs and no unions and few pensions, is it even practical to prepare for a totally unknown and uncertain future? You can take all the right steps to prepare for your future and still not get any benefits from it. In the past, nearly all of us chose the path of living for the future and sacrificing today. But the economy has changed so much it is no longer the safe bet it once was. Let’s look at three ways retirement planning has changed:
- Pensions are becoming pretty rare and even if you have one, there is no certainty you will get it when you are ready to retire. They started to disappear with the decline of the unions and manufacturing moving off-shore to foreign countries, but then the global economic recession starting in 2008 has been a nail in their coffin. I personally know several vandweller/RVers whose jobs and pensions just suddenly disappeared in their 50s leaving them living off their savings in a van. Both of them were following the “normal” American path and suddenly the rug was pulled out from under them.
- In the past the assumption was that a college education almost guaranteed a safe and secure future. But today the cost of college is skyrocketing and the rewards from having it are not at all certain. I have another friend who lives in a van and is a PHD student at Arizona State University. He expects to graduate with at least $250,000 in debt. In today’s economy, will he ever be able to repay that much money and get ahead? And what is to keep the same thing from happening to him as my other friends: in his 50s his job could be sent overseas, the pension could simply be dissolved, or they could just fire him and hire a 30 year old to replace him who knows more and costs less?
- Social Security is no longer a sure thing. At its core Social Security is a Ponzi Scheme (http://en.wikipedia.org/wiki/Ponzi_scheme) where the first people who pay in get a lot of money and the last people to put in money will get none of it back. With the Baby-Boomers all getting ready to retire, paying for their Social Security could easily overwhelm and collapse the system. The government spent all the money the Baby-Boomers paid in (it’s all gone) so it all has to come from the few workers still working. But there aren’t enough of them and too many of them are working at minimum wage jobs. The new ObamaCare will also mean more of them will be working part-time so their employers can avoid paying them health-care. The day I am eligible I will start drawing on mine because I think there is no chance it will last much longer.
2) Now we will look at the worst case for Living for the Moment:
- You probably won’t have any health insurance. By working the minimum amount and living just for now you probably won’t have the money to buy health insurance. That means that you will not live as long or as well as Americans who do have it. Eventually, unless you die in an accident, we’re all going to get a final disease that kills us. With health insurance the odds are fair you will find it early enough so that it it’s curable or at least with proper medical care gives you as many years as possible. Without health insurance, that isn’t going to happen. Yes, Hospital Emergency Rooms can’t refuse you care, but all they must do is get you stabilized, they will not fight the underlying disease for you. Once stabilized, you must leave. Without money or health insurance, you won’t be able to have continued care until your next emergency and then you can go to the Emergency Room again. By then your problem will have grown much worse without adequate care. But, offsetting the lack of health insurance is the dramatically lower amount of stress you will have by dropping out of the Rat Race. Plus, you can have a much closer connection with nature which is one of the best things you can do for your health. Together they greatly reduce your likelihood of health problems in your old age.
- As your health declines in older age you may not be able to work and support yourself. Without Social Security, a pension, or savings, you may end up as a destitute, homeless bum or bag lady eating out of garbage cans.
When I look at the most dire possibilities of each and the likelihood of them, I choose to live for the moment and not worry about the future. I think the odds of me dying young or a continued slow economic collapse are much more likely than any other possibility so I am betting my life on living fully now. And that isn’t just speculation; every vandweller I know is healthier and happier than they ever were in their old life. Many have lost quite a bit of weight. There is no doubt in my mind whatsoever that this life contributes to better health in old age.
“Death twitches my ear. ‘Live,’ he says, ‘I am coming.’” ~Virgil
To me, ultimately, the decision about which way to live comes down to simple math: which way of life give me the most good years? Most of us have 60 years of adult life lasting from age 20 to 80. During that time we will be reasonably healthy and have the energy to enjoy life from 20 to 60, but after that they decrease with every passing year. While we may live past 80, by then most of us will no longer be in good health or have the energy and vitality to fully live life so I am not including those years in my calculations.
This table makes it simple and clear: sacrificing 2/3 of my life for the slim possibility of a better 1/3 is simply preposterous to me. I won’t do it!
I believe that vandwelling has radically changed the big picture and offers us a third option, a middle path.
3) Living in a Van and Working Part-Time or for only Part of the Year:
There are three different ways to do this, depending on your comfort with risk taking . When you live in a van, you can live so cheap that the amount of time you have to work to support yourself is very little. That offers many new options:
- You can work year around, but at jobs you enjoy. Because you are working, you are paying into Social Security and preparing for your future (assuming you believe it will be here when you are old enough to draw). Because you live so cheaply you can save and build up and savings account and be able to afford to pay for health insurance. For example, if you love to ski you could work at a ski-resort in the winter and be a campground host in the summer. If you love history and politics you could work at Washington DC in the summer tourist season, then go to Florida for the winter tourist season. Whatever you choose, just make it something you enjoy and you will be working full-time and building up your Social Security and yet still fully living your life for the moment. I spent a summer giving tours in the tiny Eskimo Village of Kotzebue, Alaska and made (and saved) a lot of money on tips and had one of the best summers of my life.
- You can work less than 6 months a year and take the other 6 months off. For example, you can be a campground host for 3 month in the summer and work for Amazon for 3 months in the winter and that’s all you need to work. You can draw unemployment in the off-season and live very, very comfortably. As a bonus, the whole time you are working you will be paying into Social Security and doing something to prepare for your old age. I think it is very likely that if you live frugal enough, you could do that for a year and then take a whole year off and not work at all.
- You can do what I did and stayed at a job with a pension, health care and good wages and work part time. I hated the job but going from 40 hours a week to 32 hours a week made it bearable. I retired as soon as I could but I never would have made it that long had I kept working full-time. It was a great compromise between living for the moment and living for the future.
The bottom line is, only you can determine your willingness to take risk and follow adventure. I hope this gives you a better view of the big picture and some ideas of how to change your life.
“It is very important that you only do what you love to do. You may be poor, you may go hungry, you may lose your car, you may have to move into a shabby place to live, but you will totally live.
And at the end of your days you will bless your life because you have done what you came here to do. Otherwise, … you will do things only for a reason, to please other people, and you will never have lived. And you will not have a pleasant death.” Elisabeth Kübler-Ross