If I were to go back to school, I think I'd study retirement. That probably sounds boring to some of you, but I find the subject fascinating. No joke: My bedtime reading lately consists of books like A History of Retirement by Wiliam Graebner.
You see, retirement is a relatively recent concept. It's only really possible in wealthy nations with long lifespans. In 1880, over 75% of American men older than 64 remained in the workforce. They wanted to work. Work was evidence of vitality and productivity. It gave people purpose. Plus, most folks needed the money.
One hundred years ago, retirement was considered undesirable, something to be avoided. A 24 January 1903 article in the Saturday Review summed up the prevailing attitude: “Men shrink from voluntarily committing themselves to an act which simulates the forced inactivity of death.”
In time, “mandatory retirement” became a huge social problem. Unemployment was high. Older people were clinging to jobs that younger folks wanted — and could do better. The question became: “What shall we do with our old?” In fact, that's the title of a 1911 film about this pressing issue.
This fourteen-minute silent short from D.W. Griffith, the “father of film”, is melodramatic and heavy-handed by modern standards. (And s-l-o-w.) But it demonstrates just how prominent this debate was in American society.
In time, our perception of retirement changed. With the combination of rising wages, private pensions, and government assistance programs (such as Social Security), the stigma associated with retirement faded. In fact, retirement came to be viewed as desirable.
Consider these numbers from The Evolution of Retirement by Dora L. Costa:
- As I mentioned earlier, over 75% of men over 64 remained in the workforce in 1880.
- By 1900, that number had dropped to about 65%.
- By 1950, just 47% of men over 64 continued to work.
- By 1998, fewer than 20% of men over 64 were in the labor force.
In the 1980s, the mandatory retirement policies that had been adopted as official law and/or unofficial policy began to be deemed discriminatory and were abolished. (I'm brushing over the link in that last sentence, but if this subject interests you, you should follow it.)
Today, things are complicated. You'd think that with the abolition of mandatory retirement policies, more older people would choose to continue working. To some extent, they have. But not as many as I would expect. (In 2010, 22% of men over 64 chose to work.) Some of these people work because they have to, of course, because they need the money in order to survive. Some work because they want to.
But I believe that after a century of societal pressure to consider retirement both a social and personal positive, most of us view retirement as a goal we want to achieve, not something we want to avoid. In fact, I believe the idealization of retirement is the driving force behind today's very popular FI/RE movement. (FI/RE stands for “financial independence/retire early”, in case you're out of the loop.)
In 1917, nobody wanted to retire. People wanted to work as long as they could. Today, many young people — and hey, I'm one of them — are eager to retire as soon as possible!
What does retirement mean to you? Is it a desirable thing? Something to be avoided? How do your attitudes toward retirement differ from those of your parents and, especially, your grandparents?
[See also: The history of the early retirement movement at Early Retirement Dude]
Retirement is a goal of optional work. Its a simple freedom of choice. My ideal retirement is to have a lifestyle business to keep me engaged, but provide flexibility when I have other plans.
Retirement for my parents is something completely different. Retirement for them is loss of control, uncertainty how to spend time and a fear of moving beyond the place they lived for their entire lives.
The reason is simple. In 1917 people didn’t live as long, they wanted purpose in their lives, they needed the money, and religion (bible says if you can, work). This changed in the 1930’s with SS and other government programs to get young people into industry. Since then we have gone from a “have to work” to “work for yourself” mentality with the 50’s golden era boom, the 80’s slimey get rich doing anything mentality, to the more modern “how do you feel about your work” mentality. People work for one reason, money. If they like their job that is just a benefit. If they don’t like their job, they find a reason to become FI/RE.
As long as one puts in the time, they can get social security, medicare, etc. which has removed the major items people worked longer for (money to pay for stuff). Now people are paying more attention to what they can do along the way, so it is not a slow march to death by working a dreary 9 to 5.
I don’t know if this makes sense, but it does in my head .. and I am so ready to get out of the office at 4:30 that I cannot think straight :)
Great post and man that video is indeed slow. I view retirement as desirable, but now that I’m semi retired the Protestant work ethic part of my personality feels kinda weird about it.
Looking at the data you posted, 75% of men over 65 were working in 1880. We also have to remember that being age 65 in 1880 is probably like being age 70 now – life spans weren’t as long. But since I’m a data guy the data is indeed interesting. I enjoy demographics and things related so I might have to check that book out
In Australia where I live the average life expectancy has risen to 80+ years now from just over 70 in the 1970’s. The Australian government has raised the minimum age to access the old age pension from 60 to 65 for women and for both genders it will be 67 in the near future.
Australia has a compulsory defined contribution scheme where 9.5% of an employee’s earnings go into superannuation (similar to your retirement accounts). This started in the 1990s and although it is paid by the employer came initially from workers agreeing to forego pay increases. As the initial rate was about 3%, this has not been a big savings pool for employees now in their 60s. The Australian government also changes the rules constantly which does not give some people much confidence to save within superannuation.
My grandfathers retired at 65 and died respectively at 70 and 87. My father retired at 57 on a defined benefit pension and died at 80. My mother who is 86 now still gets benefits from that pension. Mum and Dad still had other investments outside superannuation.
Subject to my health I will be working into my 70’s:
a. because i married late and have a young family who won’t finish university until I am about 72-73
b. because I enjoy what I do
However, people need to have options for early retirement. Injuries, chronic illness happen. Ageism is still rampant in Australia.
JD, going to school and studying retirement sounds like a Beetle Bailey gag lol.
You should read “Sapiens: A Brief History of Humankind” and take this back to the beginning of humanity! If you haven’t already heard of the idea of hunter gatherers being the original affluent society, google that. Aside from that, the book has a few other interesting ideas. I really enjoyed it and there is probably some good personal finance fodder in there. The reason so many of us value travel is poked at a bit.
Retirement to me means pursing goals with the freedom from an obligation to make a profit.
Now that I am in my later 60’s now, I can understand your interest in the history of retirement. I find that it is interesting (but not always fun) to be part of this aging process and watch it in yourself and your friends and relatives. It is interesting to see what people do in their retirement years and how they handle aging.
I do notice that many who plan to work into their late years end up being pushed out of jobs when there is an economic downturn or leave because of bad health. I am always warning people heading to retirement that they do not count on saving a lot of money in their early 60s but do it earlier because of this.
A good friend of mine once said “retirement is doing what you want, when you want.” This philosophy has stuck with me, at least to some degree.
Some people enjoy the work that they do and the schedule that they keep while doing that work. Read WealthyAccountant’s “About”. He states that he is retired but he still does work. In essence, he is doing what he wants when he wants.
Retirement is about freedom, the financial freedom (hey, it’s why there is a FIRE community, right?) to pursue your passions, your goals, your objectives; not someone else’s.
Work is different now. Retirement is different now.
Corporations squeeze every little bit of productivity from their workers. Most people are teetered to work even on weekend and late nights.
I think most people would prefer to continue working if it’s self employment. Part time self employment is the ideal case for me and it has been great. Full retirement doesn’t sound that great.
I agree Joe. Everything is about the bottom line now – and making sure Ace Co. returns a profit for their investors. Left in the shuffle are the workers and they are not happy. Considering that 70% are unhappy at work – I would say that is a crisis.
Retirement provides freedom to do what you wish. Many back in the day probably never considered this as an option. Work is what you did and was your lot in life. Many also were doing their own thing – to which (I would guess) brings greater satisfaction that working for the man.
I think the people in that movie were actually just in their early 30s. Life was much harder in the 1910s.
I’m one of the ones that wants continue to work because I want to, not because I have to. I already know that I prefer to have a job (seasonally) to always look forward to. I’m good with never retiring permanently from working. I’d rather just “die in between gigs”.
This is a great perspective on it all, however I think one further aspect needs to be considered: these statistics are all about men. This is a history of male employment and male retirement. How did the workforce change every time more women would enter the workforce? WWII was a huge change, as was post-WWII, and then in the 80s there was another huge change too. More than half of all new businesses are started by women, and we also control the majority of household budgets. So how do those factors affect a woman’s view of retirement? We base less of our value on work. Most men of retirement age now base their value on work so much that many of them die within a year of retirement. Thank goodness that’s changing.
Retirement will be very different for me. I wasn’t taught financial skills, barely scraped my way through a horribly expensive divorce and am learning now. I’ll be lucky if I will ever be able to retire traditionally. I wouldn’t be surprised if there were a lot of other women in the same boat!
Thanks for the history lesson! It is cool to understand where we came from in our thinking. It is indeed complex right now. Some days I want out entirely, but mostly I want to make a life for myself that I don’t want to retire from.
I’m going to a 3-day work week in January. It seems to me it will be more sustainable long term, but we will see….
J.D., fascinating article. It’s amazing how much cultural perceptions and norms influence a society. One other factor driving down “employment %’s” in 60+ year olds – many are simply forced out, either due to downsizing or health issues.
For me, retirement is something to embrace….and I only have 206 Days remaining!!
Yes, very interesting article, which I am going to be forwarding to a few friends.
Related but off-topic: I’m seeking advice about resources to help someone else already retired with few resources, huge debt, and poor decisions. Can you suggest good books or websites for people in that situation? Most finance make-over books/sites are for helping working adults save for retirement, rather than for those already stuck in retirement.
I know someone for whom retirement is a disaster, with little option to work, no savings, ballooning debt, and an out-of-control path of increasingly poor decisions. The idea of working because you choose to, or having the option not to work if you don’t feel like it, is so far from their world, that this article wouldn’t make any sense to them. Wife just purchases as she wishes, ignoring credit card debt, refuses to budget or address debt issues. Husband has cashed in all retirement accounts to pay debts and they have taken out several mortgages on their home. Husband is in late 60s so cannot find job in his industry. Husband refuses to close credit cards wife is using. Etc. (Obviously there are personality issues involved.)
If you can suggest any books or websites which focus on financial help for those for whom retirement is a horror movie, I’d love to know about them. Or, can you address financial strategies which the already-retired can employ in some of your articles? (I’ve tried searching your site by these topics but am getting too many hits focused on other topics.) Thanks…