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Kai Ryssdal: About the only constant that we've been able to count on through this recession is that most of us have been really bad at predicting what's going to happen next. That's kind of a problem if you consider that the economy -- especially on a personal level -- is largely about what happens next.
This week, our series, "The Next American Dream," has been looking at how people are e-interpreting that dream in light of a changing economy. We've talked about education and housing. Today, the prospect of a safe and secure retirement. From the Marketplace Sustainability Desk, Sam Eaton tell us that that too might be a victim of the recession.
SAM EATON: Fifty-six-year-old Meredith McKenzie calls herself a typical baby boomer.
MEREDITH MCKENZIE: There were lots of us. We like to live large. We're very competitive. And I was no different than anybody else.
During the good years as a Southern California real estate agent, McKenzie earned a little more than six figures. No millionaire, but as a single widow she could afford to rent an upscale beach house and spend freely.
MCKENZIE: I think I bought into something that everybody bought into, which was a definition of the American Dream as being more, more, more, more, more; and an economic society that said grow, grow, grow, grow, grow.
But like most baby boomers, McKenzie forgot to save, save, save. Then the real estate market crashed.
MCKENZIE: So there was just no possibility to make any money in real estate because there was no way to close a deal.
With nothing but debt to her name, McKenzie's dreams of spending her later years golfing and traveling vanished. She was now just another baby boomer with no prospects for retirement.
But instead of trying to recoup her losses, McKenzie got a job at a nonprofit that pays less than half of her former earnings. As a program manager at the Arroyo Seco Foundation in Pasadena, she's heading up efforts to restore an industrial stretch of river to its former glory.
This morning McKenzie and her team are testing water quality where the Los Angeles and Arroyo Seco rivers converge. It's a graffitied trench with a trickle of polluted water flowing down the middle. Unfazed, McKenzie rolls up her jeans and wades in.
MCKENZIE: If you looked at my life two years ago, I was schmoozing people and sitting in fancy restaurants. And today I'm down and dirty and back to nature about as much as you can get back to nature in the city.
Retirement expert Marc Freedman is the author of "Encore: Finding Work That Matters in the Second Half of Life." He says McKenzie is at the front end of a trend that could redefine retirement.
MARC FREEDMAN: If the old dream was the freedom from work, maybe the new dream is the freedom to work. To be able to continue contributing in ways that pay the bills and provide health insurance but also provide a new sense of meaning and the opportunity to use your accumulated experience in ways that matter.
But that freedom isn't something that happens overnight. McKenzie began volunteering on river restoration projects more than a decade ago, after the death of her husband. And even after jumping in full-time, she quickly discovered that old dreams and lifestyles can be hard to give up -- starting with her home.
MCKENZIE: So here it is. All maybe 250 square-feet.
McKenzie now rents a one-room converted garage in Pasadena.
MCKENZIE: I think after I moved in here the first month I actually one night sat down and cried and said, "What have I done? What have I done? Oh my goodness."
She saw her life as a failure. But then something happened.
MCKENZIE: First of all, my stress level has gone down about 90 percent. Because when you're stressing out trying to figure out how you're going to make your nut of $6,500 a month while you're watching your opportunity to make money drop, that's extremely stressful. And all I can say is that, wow, once you get that debt relief and that stress off your back, it's really liberating. Really liberating.
Once a month McKenzie and her closest friends get together for lunch and to catch up. Pamela Brull has known McKenzie for 30 years and even got into real estate because of her. But she hasn't always shared McKenzie's positive outlook.
PAMELA BRULL: I was worried about her.
Brull has decided to stay in real estate, hoping the housing market will turn around so she can maintain her lifestyle.
BRULL: I don't think I could have done what Meredith did. You know, I just need more security. But it is scary. I have to say I think all of us feel nervous. What are we going to have to do? Are we going to have to be slaving ourselves into the ground until we're 80? So all of us have to simplify, right?
McKenzie's 60-year-old friend Kathleen Buchanan isn't as worried. She's got a federal pension. So when McKenzie first announced her career change, Buchanan thought her friend had gone off the deep end. But now, she says, it makes sense.
KATHLEEN BUCHANAN: I'm very supportive of Meredith's current transition because, for a while there, she was following the money. And now I think she's following her heart, and I think it's going to bring her her treasure as well.
Or maybe not.
A few months ago, California froze the funding for McKenzie's position at the Arroyo Seco Foundation. In the meantime, she's working for free, making enough money on the side consulting and teaching to pay her meager rent. And then there's always real estate and her unused law degree to fall back on.
MCKENZIE: We're in a time of a lot of change and chaos, and I don't think anybody can plan anything. I think all you can do is get up everyday and do the best you can.
McKenzie says just having a Plan B is no longer enough.
In Los Angeles, I'm Sam Eaton for Marketplace.