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Is Retirement Over?

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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