Whose Idea Was Retirement?
According to Dr. William Osler, a prominent physician at John’s Hopkins University, “men over 60 were completely useless to society because of their inelastic minds.”(1) Dr. Osler made his proclamation in 1905 … before AARP!
So, just whose idea was retirement anyway?
In pre-industrial America, retirement did not exist. Ancient Native Americans just moved on and left the old behind if they could not produce. Our Colonials were a bit kinder, viewing the elderly as a source of wisdom and valued for their skills and crafts.
Mass production changed all of that as a worker came to be viewed as a cog in the assembly line that eventually would wear out and have to be replaced.
As our society changed from a nation of craftsmen to a nation of industrial workers, we traded job and occupation for craft and vocation, according to author Mitch Anthony in “The New Retirementality.”(2)
As life expectancies increased, it did not take long for older workers to become the object of discrimination by authorities like Dr. Osler. The way to get rid of the problem was to come up with some sort of mandatory retirement.
This went hand in glove with the fledgling labor movement, which was struggling to organize workers. Unions quickly embraced the ideas of enforcing job security for older workers as well as providing for retirement and pensions.
Some attribute the retirement age of 65 to German Chancellor Otto von Bismark, who, in the 1880s invented a pension scheme to remove old bureaucrats. Bismark knew that the program would cost little because the average German worker never reached 65, and many of those who did lived only a few years beyond that age.(3)
The first union in the United States to offer pensions was the Pattern Makers League of North America in 1900, about the same time that American Express® began selling the first private pension. In the early 1900s the pension movement had gained momentum in America. By 1920 more than 200 new pension plans were formed. Still only 15% of American workers were covered by pensions when the Great Depression hit.
Faced with massive unemployment, President Roosevelt and his planners needed a way to put people to work. Their plan was simple … replace older workers with younger. New Dealers tested this theory with a railroad workers pension that compelled 50,000 older railroad workers to consider immediate retirement. This led eventually to the Social Security Act, which we now accept as an integral part of retirement.
To encourage older workers to retire, Roosevelt promised them immediate benefits, despite the fact that they had paid little into the system. Hence the idea that younger workers contributing to the plan would fund the retirement of older workers.
During the Second World War wage freezes were in effect. Unions had little they could offer workers, so they bargained for greater pension benefits. Businesses liked the idea as contributions to the plans were tax deductible and future obligations were not realized on balance sheets.
By this time the image of retirement had become indelibly etched in the American work force as an individual’s rightful reward for his or her years of labor and loyal service.
Initially Social Security was limited in its coverage to workers in commerce and industry, but over the years the program was expanded and liberalized to cover widows, virtually the entire working population, and certain disabled people under age 65. The most dramatic change came in the early 1970s when the program was indexed to inflation—a plan whereby benefits are adjusted upward annually in accord with rising prices.(3)
During the early 1980s, planners realized that the rampant inflation then underway and the growing older population, demanded reform of the system. Under pressure from the near-bankruptcy of the Social Security trust fund (reserves for benefit payments were down to three months), Congress found it necessary to raise the Social Security withholding taxes and to schedule increases in the age of eligibility for full retirement benefits—beginning in the year 2000 the retirement age for full benefits will be raised at intervals until it will reach 67 in the year 2027.(3)
Whether by choice or not, most of us now realize that we probably won’t experience the same retirement our parents did—but most likely we don’t want to! The author Mitch Anthony said in his book, The New Retirementality, “The new ‘retirementality’ is the ability to achieve the freedom to pursue your own goals, at your own pace, on your own terms … regardless of your age.”(2)
Although we all want to enjoy a comfortable retirement and at Wealth Advisors we work every day to make sure you can, I tell clients all the time that retirement isn’t biblical. You can’t find it in the Bible. What you will find is that people go through different seasons and changes lead to transitions.
The government or Social Security doesn’t determine when we retire. I believe God should be leading us into these transitions and seasons, whether we call it retirement or not. I don’t believe He would have us become couch potatoes when we no longer work for money. He’ll have something for us to do; a purpose to live for. I counsel everyone to understand that purpose before they stop working or ‘retire.’
