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Retiring Baby Boomers: Dropping Out to Make Every Dollar Count?

"Faced with the burden of financing the decades-long retirement of aging boomers, many of the young embrace a new underground economy, a largely untaxed archipelago of communes, co-ops and kibbutzim that passively resist the power of the granny state while building their own little utopias." This is Idea Number 4-The Dropout Economy--as predicted in Time magazine's cover article in the March 22 issue titled "10 Ideas for the Next 10 Years."

The article goes on to describe families living off the grid, barter schemes, growing your own food, and home-based jobs. "Private homes will increasingly give way to cohousing communities, in which singles and nuclear families will build makeshift kinship networks in shared kitchens and common areas and on neighborhood watch duty."

Wait a minute! Forget about the youngsters! These all sound like great ideas for aging boomers with inadequate financial resources to help them make ends meet in their retirement years! If current trends continue, vast numbers of boomers will reach their retirement years with no pensions and retirement savings that only generate a lifetime retirement income of $5,000 to $10,000 per year, at best. (See my prior posts Can't Retire Yet? Don't Despair and Saving for Retirement: Are You as Clueless as Your Fellow Americans?) Add in Social Security benefits that will range from just $15,000 to $25,000 per year, and you're looking at annual incomes of $20,000 to $35,000. As a result, millions of boomers will need to learn how to make every dollar count.

Recently I helped some relatives--a married couple in their late twenties--prepare their income tax return. Their gross annual income, before taxes, was about $20,000. They're living just as the article describes. They grow their own food, check out videos and books from the local library, and drive 15-year-old cars. They piece together several part-time jobs--which is all they can get in today's economy--even with their college degrees from respected universities. They have an extended network of friends and family who share resources and get together frequently for meals and entertainment. Money is tight, but they're happy. They have shared purpose--they do a lot of volunteering--and they have time to travel internationally on a shoe-string. Can we learn from them?

As the Time magazine article says, "...we're on the cusp of a dropout revolution, one that will spark an era of experimentation in new ways to learn and new ways to live. It's important to keep in mind that behavior that seems irrational from a middle-class perspective is perfectly rational in the face of straitened circumstances."

To get the most out of our retirement years, maybe it's time we started thinking outside our "middle-class perspective" and looked at options that might be considered more "alternative" than we're used to. Move over Gen X, and make room for granny!