The oro years

[Heat]

GETTING OLD
The oro years
Boomers can retire cheaper in Mexico and could help reduce illegal immigration.

By Walter Russell Mead, Walter Russell Mead is a senior fellow at the Council on Foreign Relations and the author, most recently, of "Power, Terror, Peace and War: America's Grand Strategy in a World at Risk."

AS DEBATES OVER Social Security and Medicare heat up, Americans might feel like doing what the old urban myth says the Inuit do: Ship the old folks out on the ice floes. It's cheap, simple and good for the polar bears.

It is also, arguably, a bit coldhearted. So here's a warm and loving alternative that the U.S. government should endorse: Send the old people to Mexico, Central America and the Caribbean.

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By one estimate, almost 20% of gross domestic product will go to seniors by 2030. Baby boomers are the first generation of grasshoppers in U.S. history. Their parents and grandparents, scarred by the Depression, scrimped and saved. The boomers put it on plastic. With private household savings rates near all-time lows, bills are coming due and the facts are increasingly clear: Some boomers not only won't be able to afford the retirement they dream of, many won't even be able to afford the retirement they fear.

The cost of retirement is also going up. In 1940, the median price for a house in Arizona was less than half the national average. Today, with two generations of retirees swelling its population, Arizona's housing costs are well above the national average. Prices at assisted-living facilities are rising at more than twice the rate of inflation.

There are simple, though not painless, steps individuals can take to improve their prospects. Put the plastic away for a while, pay down debts, build up savings. Delaying retirement a few years gives you higher Social Security payments, lets you squirrel some money away and allows any investments you already have more time to grow. And you can always develop a more realistic set of expectations: Do they have to be golden years? What's wrong with silver?

But don't underestimate the economic wisdom of migration.

Adventurous seniors already know this. Up to 1 million Americans live in Mexico (up 500% in five years, according to some figures), and tens of thousands more live in Costa Rica and Panama, countries that market themselves as retirement havens. An income that can barely cover a double-wide in Florida can swing a condo south of the border. For the price of a condo in Phoenix, you can often have a villa in Mexico.

Seniors who go south have to be brave and smart. The laws are confusing and sometimes rigged against foreigners. Crime can be a problem, the tax systems are tricky and sometimes unfriendly, and those who don't speak Spanish are further disadvantaged.

Worse, because the United States does not extend Medicare coverage to U.S. seniors living overseas, they have to find their own healthcare solutions. Though healthcare and prescription drugs can be far cheaper south of the border, serious illness is a financial issue anywhere. As younger and active retirees become older and more frail, they often have to return to the U.S. to obtain better services.

Still, helping seniors move to where costs are low could give Medicare a boost while giving seniors more choices. To that end, the federal government should smooth the path for seniors looking to retire abroad. Congress should pass legislation to allow Medicare to cover eligible seniors using certified, inspected and qualified providers. Medicare payments should be lower to these providers, reflecting different cost levels.

The executive branch should negotiate retirement agreements with neighboring countries to provide an appropriate legal framework for millions, possibly tens of millions, of U.S. seniors moving south. Consular services would need to be stepped up for expatriate seniors. Organizations such as Fannie Mae should find ways to extend the U.S. mortgage system to Mexico and beyond so that retiring seniors can enjoy affordable, long-term housing financing.

These policies would be a godsend for U.S. neighbors. Regional retirement agreements would create millions of new jobs. The influx of retirees would finance badly needed new infrastructure and vastly enhance medical services. By zoning certain regions for retirement development, countries such as Mexico could create economic growth in underdeveloped areas and help reduce congestion in major metropolises.

For the United States, this does more than reduce Medicare costs and allow more seniors to have higher living standards. Creating millions of new jobs in Mexico and beyond would reduce flows of illegal immigrants across the border. It would raise wage levels in neighboring countries, reducing low-wage competition for U.S. jobs and increasing the market for U.S. products. U.S. business, including healthcare companies, real estate developers and retailers, could follow their customers into new and lucrative markets abroad.

This is not a Democratic or a Republican program. It cuts spending, expands choice, promotes market-based development abroad and protects some of our most important entitlement programs.

Let's do it.

[mudd]

... in response to The oro years, posted by Heat on Sep 18, 2005

in the near future, you will see more middle class heading south for retirement, because it just too dam expensive to retire here. lets face it, ssc is a joke compared to what you put into it, most companies don’t offer good retirement packages, or if they do, they cut them soon after or declare bankruptcy to get out of paying retirement funds, look at the airlines,and automakers sending jobs over seas, or down south.

just an example, a Dodge diesel truck, built in Mexico, at half the price of a Ford or Chevy here, but the price of the truck is almost equal to an American made Ford or Chevy diesel, so who is getting screwed, take a guess.

[Pete E]

... in response to Re: The oro years, posted by mudd on Sep 18, 2005

Every new car that General Motors makes has $1500 cost for medical insurance for present and retired employees.I can't help but think of my $90 Colonoscopy in Colombia that was $4500 in the US.All of these things come together to hurt.
The editor of motor trend magazine did a little artical called the perfect storm,basically saying GM was very vulnerable and if a few things happened similtaneously it could sink the company.
On the positive side foriegn car companies are building cars in the US.Aparently we have some advantages that offset higher labor costs,or they might be in Indonisia or India.
As long as wages  are not too high or too burdened with benefits.Hyundai,a Korean company is building its new Sonata in Alanbama.This is going to be a very successfull car,almost as good as an accord for thousands less.But they are not burdened with old contracts and labor rates.Give someone a $16 an hour job in Alabama they are happy to have it.Try and pay that in Detroit they think you cheated them out of $14 an hour.The world is changing.Buyers want the best deal,the company and the workers need to deliver it or they will both be out of business.
On the other hand the buyer,which is also us,benefits.Basically US buyers have gained more than workers have lost.What goes first is what you do least efficiently.What you switch to is what you do most efficiently.
The main reason no inflation right now is increasing efficiency of production.
Its a changing world.Be glad if yours has not been turned upside down.Some people just got caught in the wrong industries at the wrong time.Plan ahead for yourself,you might not be able to depend on the old ways of it being done for you.

Pete

[mudd]

... in response to Re: Re: The oro years, posted by Pete E on Sep 18, 2005


i have seen wages in my industry go down with the influx of laborers coming from mexico, willing to do it for a lower wage. is it good for the consumer, sometimes yes, sometimes no. but i can tell you this, developers are making a lot more money than before due to the lower wages, and the price of houses are through the roof. definately, the cost of the lower wages isnt passed on to the consumer in this case. sooner or later, we will be an "service" country instead of a "manufacturing " country. like you said, if you havent planed for it, your going to be on the losing side of the table.

[WS244]

... in response to Re: Re: Re: The oro years, posted by mudd on Sep 18, 2005

[This message has been edited by WS244]

He is not the average wage earning blue collar average american working joe, which is why i call him professor, plus he understands women better than 90% of the posters on this board.

You are correct, aside fom the fact the builders are making a killing paying lower wages at his end of the rainbow yet still getting more from our side of the rainbow, and unless you are a state, federal civil service, or union member, your boss could replace you tomorrow with a foreign worker, (which many employers are doing as you well know) just as qualified as you for half the price.  Also remember many of the foreign nationals working here, are automatically in a minority lesser advantaged classification on arrival and employ.  This is almost outrageous as the well educated Indian engineers coming over here are of the higher class Indian social structure, or at the top of the indian social "caste system".  Kind of a win win for them as in their home country they have their well to do families to educate them, and then come over here, and having available the various diadvantaged government status programs.

But getting back to it, the average american working joe can not/ does not want a degree in rocketry.  He wants a reasonably paying job to pay for his family and education.  People say well americans need to have more education.  Well this is somewhat hippocritical because there are already too many educated people in the world for the educated jobs available in the world.  Look at all the educated Colombians. Even today with a good Colombian economy the educated Colombians are knocking at our door to come here to work at a level of their education not available in Colombia.  China is booming with an annual 8% plus growth rate, and they are doing this on "manufacturing".  We can never compete with them wage wise while keeping our middle class standard of living.  People say well we can keep ahead by high tech.  The Chinese you recall put a man in space last year!!!! What they do not have in technology they are sold or they just steal it.

This globalization free trade is free for everyone else in the world, particularly the Chinese and at our expense.  The Chinese are the 3rd largest importer of oil.  Our gas prices are double from a year ago.  As the Chinese increase their manufacturing capabilities, gas here will go higher.  Remember they are exempt from the kyoto treaty.  So the feds here will pass laws to have your car get 50 miles per gallon.  So great, we develop the car which will cost americans 25 percent more for to save 25% better gas mileage, then those cars will end up being built in China.
All this is great for Walmart and their stockholders, 80% of Walmarts inventory is made in China, yet 50% of walmart employees do not even have health insurance.  so much for globalization and free trade with bilions of dollars in trade deficits.
Can it be fixed, sure it can. Just lower the`wages for our senators and congressmen to 50,000 a year with no pension or medical benefits.

[stefang]

... in response to Re: Re: Re: Re: The oro years, posted by WS244 on Sep 19, 2005

"Can it be fixed, sure it can. Just lower the`wages for our senators and congressmen to 50,000 a year with no pension or medical benefits."

I would love to see this but it will never be done in a Republic unless we would of voted for someone like Perot. Only a Democracy would allow the citizens to truely rule their country. Pete is wrong about the zero inflation above. Food, Housing, Education, Medical all have been moving above average workers wages for years so today people are worse off for basic neccesities. The reason the government can say no inflation is because it leaves most of these things off of their calculations so they can jip you on their Bonds. Count the real things needed by most Americans to survive and the average paycheck is not keeping up.

The only way you can get ahead is if you are good and lucky in starting your own business or making very good investsments in the stock market. Government bonds, because they under report inflation get you nowhere with your money, in the future you will be lucky to break even after the true inflation is calculated.

[WS244]

... in response to Re: Re: Re: Re: Re: The oro years, posted by stefang on Sep 19, 2005

[This message has been edited by WS244]

Well everyone has a different definition, and i will respectfully disagree.  It is actually opposite.  A Democracy self  destructs in time while a Republic survives. For 175 years this country was a Republic, 40 years ago became a Democracy, and ever since our standard of living has been going down.  Remember China is a Red Communist State, only certain people vote, yet China has a growth rate of 8%.
China is also going to be the next superpower.  In the name of democracy, capitalism and free trade the defeatists in this country are well on the way to letting them do this.

Here is an example of the difference.  Mexico is a Republic, not a Democracy, and never has been.  Mexico as a Republic satisfies their economic problems, their poor, uneducated, etc. struture by dumping their problems on us, and at our expense.  In a way you have to give credit to the Mexicans for they are smarter than we are.  China is doing the same but in an industrial way at our expense.
Does one really think in 10 years when China has the corner on most industrial goods they will not triple their prices!!  They will eventually blackmail us economically.  Remember with the Chinese patience is a virtue and they are very Nationalist.  In a Democracy on the other hand, as a Democracy is self righteous, a Democracy thinks it is their duty to feed the world, by the way at your expense, just look at our open borders if one disagrees.

In any case yes one can start their own business, i am self employed, broke more often than not.  One can invest in the stock market.  But with all the hype there is only a small percentage of the majority who do this/ or can do this.

[Pete E]

... in response to The oro years, posted by Heat on Sep 18, 2005

Heat,
I agree,except for the part about the executive branch getting involved.I don't think government intervention is required.Countries that want US retires can entice them if they like.
Panama,for instance,has gotten agresive at this.There iws a whole package of benefits you get along with a pensionado visa to Panamas.The one I like is being able to buy or bring in as car duty free every 2 years.i'm n ot sure the duty in Panama,but if its anything li9ke Colombia a person could drive a car 2 years then sell it for a profit,then do it again.
I looked at Panama.Urban life ends at the Panama City limits.Panama city is OK,but its alot more expensive than Colombia and I guess bottomm line the chica situation looked bad so on to Colombia.But lots of MARRIED people moving there.Kind of the next Costa Rica.Funny,if you mention Colombia their they turn up their nose."Its so dangerous" they say.
I have been toying with writting a book,people are encouraging me.It would be either 2 books or one combining 2 ideas.Probably that.Basically its expand your thinking out of your old box and shop for the lifestyle you want in the global market.Follow traditional thinking here a bit to see what a box people place themselves in without even being aware of it.
Lets consider financial planning and one Suzy Orman's thinking.First,she doesn't know anything about real estate and if you followed her advice you would have missed the biggest opportunity  a person is ever likely to have to make money the last few years.And you didn't have to have alot of money to do it.Most financial planners are securities oriented,They think things like 5% bonds make sense.So you need to save and save forever to have enough money to live comfortably in your old age.But even more depressing,she makes this case for old age care,that unless you can remove your mind from the box she would put it in makes sense.The chance you will need you house or car insurance is small,but the chance you will need old age care insurance is high.So you save all your life to afford lying on your back in an institution the last few years of your life.What a GREAT thing TO PLAN FOR.How about how other countires do it,where the old person is an honored member of the household,not somebody to be instituitionalized?Better yet,how about the idea of a spouse maybe 20 years younger that would be happy to have you and take care of you as you aged?How about the idea of a country with a cost of living such that you could get by fine just on your social security check?
So,particularly for the now single guy thinking of his plans from this part of  his life forward,perhaps he already has enough money now and coming down the line to make this change or will before too long?Perhaps its as simple as removing our thinking from the box that it is in,that things have to happen in a certain way?
One excample of box thinking,the welfare family where they don't know anything else.They don't think anything else is possible.The daughter might be planning her babies to get her check,the son might be helping women in that regard and dealing drugs.
Second example,the family that listens to a Suzy Orman,thinks they need to save and struggle their whole life and usually winds up leaving alot of money  to some ungratefull kids who have some fun with it.WE are spending our childrens inheritance is bumper stcker you see on RV's.I say right on.
Now,we do have to think about things like currency re evaluations and things changing globally.Traditionally that has happened very slowly.But things are accelerating quickly.The one thing we can count on is change.So its not quite as simle as In have put it.But with some planning not that hard at all,if a person is willing to be adventerous and open minded.
I for one say if those kids are kicking at 21 they are on their  own and I will figure out how to enjoy my life as much as possible as soon as possible.Don't delay gratification right in to the grave.

Pete

[Heat]

... in response to Re: The oro years, posted by Pete E on Sep 18, 2005

Don't delay gratification right in to the grave.
Pete ""

Words of wisdom my Amigo.

[WS244]

... in response to The oro years, posted by Heat on Sep 18, 2005

[This message has been edited by WS244]

A nice thought but in reality this just further helps with the demise of the U.S.A.  The U.S. policies in place by both republicans and democrats over the last 45 years have gotten us in this situation today, and as you say is forcing hard working americans to move out of this great country to have a reasonable retirement lifestyle.  

People say this is due to globalization, well if this is due to globalization all things should be equal, but look at the numbers, China is growing at 8% a year, developing a middle class, while our economy is deep in debt, growing at 2%, and losing our middle class at the same rate we are losing manufacturing jobs.  last week the U.S. chamber of commerce, a proponet of free trade policies since day one, finally admitted their idea that blue collar manufacturing jobs in this country no longer mattered because of the high tech jobs here coming on line, well guess what, they now realize the high tech jobs are leaving just as fast as the blue collar jobs.  Wthout manufacturing jobs a middle class society cannot exist, and anyone with a high school education can understand this.  People say our labor rates are too high. well lets start paying our elected officals 35,000 a year instead of 120,000 a year with no benefits as the average american, and see how long this giveaway continues.  Only 13% of the U.S workforce is unionized so do not blame it on them.  
All we need are more socialist minded bureacrats in their eyes determined to lower our standard of living in fairness to the rest of the world.  At least now americans have the option to live where they want without another government bureaucracy.  With another bureaucracy they will eventualy dictate to one where to live and spend their dollars where there is the most poverty in the world, as in africa.  If one does not think this can happen, just look at the recently shelved bill requiring all men to give background checks to potential foreign brides etc.  
Anyone seeing last nights forum with the ex pres about Africa can see what is in store for U.S. taxpayers next.  Let us be nationalists first and forget the utopian idea of everyone in the work eating the same food in life.

[OkieMan]

... in response to The oro years, posted by Heat on Sep 18, 2005

Heat,

Excellent post. It is definitely food for thought.

                              OkieMan