Has the concept of retirement come to an end?
Background
Retirement, in human terms, is a new concept. Until the industrial age and the massive
shift from farms to factories, there really wasn’t retirement. One worked the family farm or ranch until
unable to work. At that point one hoped
that his children would take care of him during his short remaining life. Industrialization changed much of that. While manual farm work was back-breaking
labor (and, even with today’s highly mechanized farms, remains so), coal
miners, steel-mill-hands, textile plant employees, slaughterhouse and
meatpacking plant workers and millions of others had it even tougher, with
serious workplace injuries and fatalities common.
Bismarck is credited with the first old-age pension in 1889.
The industrial age was dawning, and Germany needed an incentive to convince
young workers to leave the farm for factory jobs in the cities. This was a part of that plan. It became
widely copied in form and substance. It
is generally agreed that the qualifying age of 70 was set above the average
lifespan at the time, making it more of a lottery than a retirement guarantee. When the Roosevelt administration came up
with Federal Insurance Contributions Act - e.g. Social Security – in 1935, it
too set the retirement age above the average lifespan at 65. At that point in time, the expected lifespan
was 61.7 years.
Living to 80 and Beyond
Today, life expectancy in the U.S. is pushing 80. I would project that to climb steeply and
remarkably. While there are a couple of
negative factors for longevity in the U.S. , e.g.- obesity and an increasing
number of antibiotic-resistant infections- there are far more positives: a
general awareness of the benefits of exercise, a decline in smoking, a variety
of engineering improvements in cars (air bags, seat restraints, crumple zones)
and roads (replacement of anchored light posts and highway signs with breakaway
posts; light reflectors), statin drugs, widespread availability of food for
even the most indigent, hip replacement surgery, cancer treatments, stents,
pacemakers and much more.
Dr. Aubrey de Grey believes aging is a disease and can be
treated as such. Resulting in lives that
are really long. Really, really long. If he’s correct, some readers of this might
live far beyond 100. If there is a
return to the Biblical age of Methuselah, you are going to work for a long
time. Very, very long.
Equally important, much of the most physically destructive
work has been eliminated by automation and engineering changes. Fewer bodies are being worn out by lifetimes of strenuous labor compared to
seventy-five years ago.
Household Net Worth
As someone who has been let go after a business sale, fired
after a hostile takeover, and fired in a restructuring, I understand the
difficulty in accumulating sufficient financial assets for a comfortable
retirement. Having said that, I’m
appalled at just how little many of my generation have saved. According to the analysis of household wealth
in the most recent U.S. Census Bureau report, the median household financial
assets for 55-64 year olds is a meager $41,000, a long way from funding a
comfortable retirement. Some of those
households of course have traditional corporate pension plans, and others may
have military or government pensions, making retirement much more attractive.
And that report was prepared shortly after the recession reduced the value of
most financial assets including balances in 401(k)s. It is reasonable to assume that the long
market rally would have increased these values.
Nonetheless, for many that is a bleak outlook. But
only if they stop working.
U. S. Fiscal Challenges
With the accumulated debt of the U.S. approaching $18
trillion, and ongoing budget deficits, the key social safety net programs of
Medicare, Medicaid and Social Security will remain under pressure. It is very unlikely that benefits will become
richer in the future.
Concluding Thoughts
At Jobs Over Fifty, we’ve been recommending that everyone
develop a plan for the “2nd 50”, that is, a plan that assumes that
individuals turning fifty today have a real probability of living to 100. Given that, we suggest that the retirement
that most envisioned in the 1960’s and 1970’s is unlikely to materialize. Instead, we predict that many, if not most,
will work into their seventies (given that some of that might be part-time). The evidence is strong that the most
important determinant of whether or not one outlives savings is how long one works.
www.jobsoverfifty.com
supports experienced workers seeking new employment or ideas to assist in
maintaining their current employment.
For action-oriented ideas to achieve and maintain work
performance at a peak level so that employers beg you to not retire, may we
recommend Survive
And Prosper, Fifty Steps to Job And Career Security?
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