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The History of Retirement

Elvis Elvis

Until the 20th Century, people were more apt to die young than old. Not surprisingly, our forefathers did not worry about their retirement because very few were going to retire. Arthritis, heart disease and Alzheimer’s weren’t major concerns because people were far more likely to die of acute infectious diseases before age related illnesses began to emerge.

Beginning in the last century, something volcanic has begun. Thanks to advances in sanitation, public health, pharmacy, food science, medicine, surgery and more recently wellness-oriented lifestyles – most of us will age. We will remain healthy and vigorous well into our 70s and 80s and, for some, 90s. And tomorrow’s elderly will, in all likelihood, live even longer.

How Retirement has Evolved

The history of retirement can be divided into four phases. The “first phase” of retirement lasted until the beginning of the 20th Century. For hundreds of thousands of years, people didn’t retire. They worked until the end of their lives. And it worked for these generations because they felt a part of the family, and this generation felt productive and connected.

The second phase began around the 1920s, when industrialization after the invention of the Assembly Line, called for the recruitment of young, able men and the removal of older, less productive workers. However, since life was relatively short, during that phase most retirement only lasted for a year or two, and it was seen as a brief period of rest…after a life of toil.

Then, sometime around the 1960s, 1970s, we began to glamorize retirement as a period of leisure and play. A person was seen as successful if they were retired, and the earlier they retired, the more successful they were perceived to be.

The History of Retirement

During this third phase, life expectancy has been rising but the average age of retirement has actually been lowering and so today, the average length of retirement has vaulted to well over 20 years.

The first pension plan was designed in Europe by Otto Von Bismark in the late 1880s. He was asked to create a pension plan for their aging bureaucrats, and he had to pick an age in which people could be thought of as too enfeebled, too run down, too ancient to continue working and, therefore, eligible for state support. He picked 65. That year the average life expectancy was 45 years of age.

Sixty-five used to be old. It’s not anymore.