UNPACKING THE BACKPACK – Retiring the Idea of Retirement

Retirement is a rather quaint tradition that is becoming a bit of an anachronism. While most Americans see decades of retirement as practically a Constitutional right, the reality is that the concept of decades spent not working in our golden years is rather impractical for most. The Golden Age of the Golden Years probably passed peak affordability sometime back in the late 1980s to the early 2000s. And, truly, that might be acceptable and even a good idea for many because literal retirement may not actually be healthy for people physically or emotionally. 

The idea of “retirement” as contemporary Americans know it is actually a mid-twentieth century invention developed in the heyday of Social Security and Medicare. Granted, while people have always tailed off in terms of productivity in their later years, the idea of literally not working to live and simply sitting around with little to do is not a characteristic of most societies throughout history. In some ways the idea of retirement began with and was fully embraced with the Greatest Generation, and it’s probably going to end with the youngest Baby Boomers and perhaps the oldest Gen Xers.

The basic concept of retirement was envisioned and invented in 1881 by Otto Von Bismarck, chancellor of the unified Germany in the late nineteenth century. Deciding that, after a lifetime of work, Germans were entitled to draw a retirement salary when they turned seventy, he established the first codified pension system. Granted, in those days most Germans died long before the age of seventy, with the average citizen barely reaching fifty years. Thus, Bismarck’s idea was more of a political ploy than a practical system. 

Retirement became the expectation and norm in the United States following the Great Depression with the advent of Social Security. The second key element to establishing retirement came with the passage of Medicare in 1965. A fundamental reason for a national health insurance program for senior citizens was keeping them out of poverty when they were no longer able to work, and their health care costs began to elevate. These days with the catastrophic rise in medical costs, the idea of Medicare is non-negotiable, as is the expectation of retirement. 

However, the golden years spent drawing a salary while sitting in a rocking chair is becoming increasingly precarious. According to CNBC, “The U.S. average cost for retirement is roughly  $850,000 for 25 years and $1.1 million for 30 years.” With the average personal income for Americans at $62,000 annually, amassing that sort of nest egg seems daunting. With Social Security checks averaging roughly $21,000 annually, and annual retirement expenditures averaging between $50K – $70K, there’s a clear disconnect between the dream and practicality of retirement. Additionally, in regards to health care, the Kaiser Family Foundation, a non-profit health care research organization, reports that “In 2016, half of all people on Medicare had incomes below $26,200 per person and savings below $74,450.” Most Americans can expect to have an average health care cost in retirement of nearly $160,000 over a twenty-five year span.

However, there may be a better reason to dispense with the idea of a retirement just sitting around doing nothing. Research suggests that continuing to work is a way to live longer and happier. We need a reason to get up in the morning, and many retirees find themselves returning to work in some capacity within a year or two of retiring. Granted, that can depend on the nature of the work. Clearly, labor-oriented jobs preclude longer careers, though my father-in-law was still driving a truck at the age of seventy. 

Clearly, the contemporary workforce will need to adapt to changes in the economy, especially in the era of artificial intelligence. With uncertainty about interest rates and inflation, assumptions about the earning power of money are becoming increasingly murky. Recently, the Denver Post reported on the rise of multigenerational housing which is driven by retired couples unable to afford to live on their retirement savings. For Millennials and Generation Z, these living situations may become the norm, and that’s not necessarily a bad thing.

With longer working careers becoming the norm, it will probably become necessary for business, communities, and governments to consider changes which will make that more amenable. Some possible accommodations include four-day work weeks, longer paid vacations, and the expansion for long-term family leave. These necessary changes could ease the retirement of retirement.

Michael P. Mazenko is a writer, educator, & school administrator in Greenwood Village. He blogs at A Teacher’s View and can be found on Twitter @mmazenko. You can email him at mmazenko@gmail.com