Author’s Note: This is a series of selected highlights from two years (1986-88) of budget travel through 18 countries and a half-dozen US States – hosted all along the way by national and local YMCAs – from Samoa, Fiji, New Zealand, Australia, and Papua New Guinea, to Indonesia, Singapore, Malaysia, Thailand, Burma, The Philippines, Hong Kong, China, Macau,Taiwan, Korea, Japan, and back to the USA.
From Bali, I headed to Maluku, the fabled Spice Islands of Indonesia – and what an adventure it was! Our flight was canceled (not uncommon in Indonesia), but a military transport plane happened to be available, and flew us to the Banda Islands for a reasonable price.
Sailing on a variety of local vessels through deep, indigo-blue waters, schools of dolphin playfully welcomed us to each new group of jungle-clad islands – brilliant green in contrast to the azure sea and sky. These islands are fascinating both in their astonishing natural beauty, and because of the well-preserved 16th century colonial forts and estates. Amid this splendor is a pervasive Pacific Island feeling, but with the distinctive flavor of Asia.
Traveling with Alice, a young backpacker from Scotland, we climbed volcanoes, explored colonial ruins, wandered through steaming jungles dimly lit up with rays of sunlight slanting through the misty silence, dove in some of Jacques Cousteau’s favorite haunts, and beefed up on delicious food liberally spiced with cloves, nutmeg and cinnamon, for which the islands are famous. It was especially enjoyable staying with the local people in their homes. With very little English spoken in these isolated islands, it was necessary and rewarding to do it all in Indonesian.
Continuing to the island of Java I visited YMCA youth development, education and leadership programs in the city of Yogyakarta, renowned as a center of education, classical Javanese fine art and culture such as batik, ballet, drama, music, poetry and puppet shows. We toured ancient temples and night markets rocking with loud music, mania and crowds – and with oddities like fried cow skin and steamed chicken brains (I didn’t know chickens had enough brain matter to eat!) and weird freak shows featuring dancing giants and dwarfs.
In Jakarta, a YMCA staff member took me for a hair-raising motorbike ride through the city – past the open sewers that line the sidewalks and streets, challenging the traffic and going up onto the sidewalks to get past particularly bad traffic snarls – leaving me frazzled and well doused from head to toe in a layer of sticky black soot from all the automobile and motorbike exhaust. The distinctive divide between rich and poor was stark as we sped through poor urban neighborhoods – past people squatting, washing clothes and eating utensils, brushing their teeth, and shitting all in the same squalid river – and then past modern hotels and shining high rise office buildings.
By train and then by boat, I sailed along the beautifully rugged Sumatra coastline to Padang for the bull fights, and on to the pleasant coastal village of Air Manus (‘Sweet Water’) and to a guest house run by the friendly old caretaker ‘Papa Chili Chili.’ A spectacularly scenic bus ride north of Padang brought me to the cool, easy-going mountain town of Bukittinggi where I climbed another 10,000 foot volcano – the most active one on Sumatra.
Unlike Yogyakarta’s dangerously active Mount Merapi – spewing fire, smoke and ash – this Sumatran ‘Merapi’ (‘Fire Mountain’) was dormant — for the time being anyway, and one of three volcanoes surrounding the scenic town.
A thick cloud bank moved in just as my companions and I summited the cone, causing us to nearly lose our way on the poorly marked trail along a perilously steep drop off. When we finally made it down, the park ranger (belatedly) warned us of the potential danger on top – and led us to a gruesome color photo tacked to his bulletin board of a foreign climber they found three weeks after he went missing. He had probably become lost in a sudden white out, just as we were, but tragically had fallen to his death. Lying in a jungle puddle his face was gone, totally rotted away.
I toughed out eighteen brutal hours by bus to beautiful Lake Toba, a large natural lake occupying the caldera of a supervolcano in the middle of the northern part of Sumatra, but was content to skip the overly commercialized Samosir Island in the center of the lake. About 100 kilometers long, 30 kilometers wide, and up to 505 meters deep, Lake Toba is the largest volcanic lake in the world.
My visa had run out, so my final days in Indonesia were spent basking in the quiet, local flavor of an obscure town far from all the tourists, where I enjoyed a fitting and wonderfully refreshing final evening – the sensual massage was like food to a starving man. She spoke not a word of English, but by then, I could ramble easily in the language. And like a bad habit, I was leaving again. But my last night in Indonesia simply added to the long list of outrageous experiences and fond memories, and a keen desire to return for more!
Stay tuned for Asia-Pacific Tour: Malaysia and Singapore – coming soon!
You can read more about Jim’s backstory, here and here.
Incentives for Retirement Savings
During the past few months, the Tax Review Commission, a group provided for in our state constitution that is supposed to meet once every five years, has been busy at work. The Commission is tasked with recommending changes to our tax laws, and its consultant has recommended limiting the pension exemption that we now have in our state income tax code so that it only exempts $25,000 per year.
Our current pension exemption only allows taxpayers to exclude pensions as the result of an employer contribution. So, it applies if an employer puts something away for its employees, but it doesn’t apply if the employees put something away for themselves under a plan sponsored by the employer. For example, if I contribute $100 to my employer-sponsored 401(k) plan and my employer makes a matching contribution of $50, then when I retire and the plan pays me $180, only the one-third attributable to the employer contribution ($50 / $150 total) would be exempt from our state income tax.
Apparently, this rule was designed to take care of defined benefit plans, which many companies had in the old days and which our state government still has now. In modern times, however, people normally get, and employers normally offer, IRAs, Roth plans, 401(k) plans, and defined contribution pension plans. The distinction between the plans that are now taxable and those that are exempt is sketchy at best. If we as a policy matter want to encourage retirement savings, shouldn’t we be encouraging it whether the employer puts something away for the employee or the employees put something away for themselves?
The federal income tax system also has an incentive for retirement savings in that it allows a deduction for contribution to some retirement accounts such as traditional IRAs, even if the contribution is made after the end of the tax year. (Hawaii mirrors this incentive, but generally taxes distributions from the accounts, like federal law.) President Trump’s proposal for tax reform has not yet put this incentive on the chopping block.
This feature of our income tax system is particularly important because not all employers offer pension plans of any kind, and anyone can establish an IRA. One interesting story from one of our loyal readers illustrates this feature of our income tax system.
In February of one year, with the April 15 deadline fast approaching, father and son were at the kitchen table, with receipts, calculators, and tax forms strewn about the area normally occupied by plates, serving trays, and utensils.
“Argh,” says Son. “It looks like I’m going to owe money to the IRS. A little over $1,500.”
“And,” says Father, “you will need to deal with penalties for not paying enough in estimated tax.”
“Oh, no! I didn’t think of that one!”
“And did you put aside money for your later years?
“No…I’m having a hard enough time with the bills I have today!”
“You know what? I have an idea.”
“What is it, Dad?”
“I am going to give you $4,000. We’re going to open a traditional IRA for you and we will put the money in there. Put $4,000 on the IRA deduction line and see what happens.”
“I don’t owe any more! If you do that, Dad, it would be really great!”
“But there is one condition.”
“Oh? What’s that?”
“You’re going to put the tax refunds you get into the IRA so you can take the same deduction next year. And the same goes for the year following. And so on.”
“I can do that. Deal!”
That was a happy ending for Son, who escaped immediate financial troubles and was able to see a ripple effect from the savings; and for Dad, who encouraged his son to save money responsibly and was able to start teaching him how to invest it.
These times of decreasing employer-provided retirement benefits and the uncertainties of Social Security point up the need for government to retain incentives for people to provide for their own financial security after retirement.