History of retirement

Last updated

Retirement, or the practice of leaving one's job or ceasing to work after reaching a certain age, has been around since the 18th century. Retirement as a government policy began to be adopted by countries during the late 19th century and the 20th century. [1]

Contents

18th century and prior

There had been a long practice beginning in the Roman empire to the modern nation states of providing pension to those who had served in the military. [2]

Cotton Mather, the 18th century New England Puritan minister and author, proposed that elderly people should be "pleased with the retirement which you are dismissed into". [1]

19th century

In 1881, [3] [4] the conservative German chancellor, Otto Von Bismarck, in a maneuver against Marxists who were burgeoning in power and popularity, announced that anyone over 70 years old would be forced to retire and that he would pay a pension to them. [1] Bismarck drafted the formal request by Emperor, William I in 1881 to the Reichstag: "...those who are disabled from work by age and invalidity have a well-grounded claim to care from the state" [5] The German welfare program provided contributory retirement benefits and disability benefits. Participation in the retirement system was mandatory and contributions were taken from the employee, the employer and the government. [5]

In the mid-1800s certain United States municipal employees, including firefighters, police and teachers, started receiving public pensions. In 1875, the American Express Company began to offer private pensions. By the 1920s, a variety of American industries, from railroads to oil to banking, began offering pensions. [6]

20th century

In his 1905 valedictory address to the Johns Hopkins Hospital, the eminent Canadian physician William Osler expressed his conviction that a man's best work was done before he was forty years old, and that by age sixty, he should retire. [7] He called the ages between twenty five and forty the "15 golden years of plenty". Workers between ages forty and sixty were tolerable because they were "merely uncreative". But after age sixty the average worker was useless and should be put out to pasture. [1]

Retirement as a concept began to be widely adopted in the United States after the period of the Industrial Revolution, where numerous aging factory workers began to show signs of aging: slowing down assembly lines, taking excessive sick days and usurping the spots of more youthful, more profitable men with families to bolster. Also, older workers brought about unemployment among the youthful population by declining to resign. The Great Depression exacerbated things. Though retirement was viewed by some as an essential adjustment, many among the older populace resisted the idea of retirement. [1]

By 1935, the idea of paying older persons a pension sufficient to get them to quit working became widespread. A Californian, Francis Townsend, proposed a plan offering compulsory retirement at age 60. In return, the Legislature would pay benefits of up to $200 a month, provided he spent it all quickly. Some Republicans supported the Townsend Plan but most experts said it would be impossible to finance. President Franklin D. Roosevelt had a team working on a plan and in 1935 he secured the Social Security Act of 1935, which made workers and their employers fund their retirement at age 65. [1]

Eleanor Roosevelt said hopefully of retirees, "Old people love their own things even more than young people do. It means so much to sit in the same chair you sat in for a great many years." [1] However, most resigned individuals wished they could work. The issue was still intense in 1951, when the Corning Company assembled a round table to make sense of how to make retirement more popular. [8] At that gathering, the writer and student of Eastern and Western cultures, Santha Rama Rau, observed that Americans did not have the ability to appreciate doing nothing. [1]

By 1910, Florida got to be distinctly available as a retirement destination to the white collar class. Retirement communities started to show up in the 1920s and 30s. The explosion of golf courses, and the onset of films and TV transformed having nothing to do into a leisure time activity. The distribution in 1955 of Senior Citizen magazine, which quickly went defunct, contained the first popular usage of the phrase "senior citizen". [1]

In 1999, The American Association of Retired Persons dropped "Retired" from its name and turned into "AARP Inc." to reflect that its focus was no longer American retirees. [9] [ failed verification ]

Present day

According to the Mental Health Foundation, one in five of present-day retirees experiences depression. Those living alone because of bereavement or divorce are more at risk. Physical health problems can also make people more vulnerable to mental health issues. Recent studies have indicated that "retirement increases the chances of suffering from clinical depression by around 40 percent, and of having at least one diagnosed physical illness by 60 percent" [10] On the other hand, many workers have adopted scaling back on their jobs at around 55 or 60, or even changing careers, but still working for 15–20 more years. [11]

See also

Notes

  1. 1 2 3 4 5 6 7 8 9 Weisman, Mary-Lou (1999), "The History of Retirement, From Early Man to A.A.R.P.", The New York Times , retrieved December 23, 2016
  2. ↑ Robert L. Clark, Lee A. Craig, Jack W. Wilson (2003). "A History of Public Sector Pensions in the United States" (PDF). Wharton School of the University of Pennsylvania. Archived from the original (PDF) on February 27, 2016. Retrieved March 2, 2017.{{cite web}}: CS1 maint: multiple names: authors list (link)
  3. ↑ Social Security Administration. "Otto von Bismarck". Social Security History. Retrieved September 12, 2022.
  4. ↑ Laskow, Sarah (October 24, 2014). "How Retirement Was Invented". The Atlantic. Retrieved September 12, 2022.
  5. 1 2 "Social Security History". ssa.gov. Social Security Administration. n.d. Retrieved February 26, 2017.
  6. ↑ Laskow, Sarah (2014). "How Retirement Was Invented". The Atlantic . Retrieved March 2, 2017.
  7. ↑ "The William Osler Papers". U.S. National Library of Medicine. n.d. Retrieved February 26, 2017.
  8. ↑ Freedman, Marc (1999), Prime Time: How Baby Boomers Will Revolutionize Retirement And Transform America, ISBN   9780786724185
  9. ↑ "AARP History". AARP. 2009. Archived from the original on September 5, 2015. Retrieved September 17, 2016.
  10. ↑ Parkinson, Caroline (2013). "Why retirement can be bad for your health". BBC. Retrieved February 26, 2017.
  11. ↑ Richards, Carl (2016), "A Retirement Plan With Less Golf but More Satisfaction", The New York Times , retrieved December 23, 2016

References and further reading

Related Research Articles

Retirement is the withdrawal from one's position or occupation or from one's active working life. A person may also semi-retire by reducing work hours or workload.

<span class="mw-page-title-main">Pension</span> Retirement fund

A pension is a fund into which amounts are paid regularly during an individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be:

A pension fund, also known as a superannuation fund in some countries, is any program, fund, or scheme which provides retirement income.

<span class="mw-page-title-main">Social Security (United States)</span> American retirement system

In the United States, Social Security is the commonly used term for the federal Old-Age, Survivors, and Disability Insurance (OASDI) program and is administered by the Social Security Administration (SSA). The Social Security Act was passed in 1935, and the existing version of the Act, as amended, encompasses several social welfare and social insurance programs.

<span class="mw-page-title-main">Welfare</span> Means-oriented social benefit

Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifically to social insurance programs which provide support only to those who have previously contributed, as opposed to social assistance programs which provide support on the basis of need alone. The International Labour Organization defines social security as covering support for those in old age, support for the maintenance of children, medical treatment, parental and sick leave, unemployment and disability benefits, and support for sufferers of occupational injury.

<span class="mw-page-title-main">AARP</span> American nonprofit organization

AARP, formerly the American Association of Retired Persons, is an interest group in the United States focusing on issues affecting those over the age of fifty. The organization, which is headquartered in Washington, D.C., said it had more than 38 million members as of 2018. The magazine and bulletin it sends to its members are the two largest-circulation publications in the United States.

This article lists the statutory retirement age in different countries. In some contexts, the retirement age is the age at which a person is expected or required to cease work. It is usually the age at which such a person may be entitled to receive superannuation or other government benefits, like a state pension.

<span class="mw-page-title-main">Railroad Retirement Board</span> Independent agency of the United States government

The U.S. Railroad Retirement Board (RRB) is an independent agency in the executive branch of the United States government created in 1935 to administer a social insurance program providing retirement benefits to the country's railroad workers.

The Social Security debate in the United States encompasses benefits, funding, and other issues. Social Security is a social insurance program officially called "Old-age, Survivors, and Disability Insurance" (OASDI), in reference to its three components. It is primarily funded through a dedicated payroll tax. During 2015, total benefits of $897 billion were paid out versus $920 billion in income, a $23 billion annual surplus. Excluding interest of $93 billion, the program had a cash deficit of $70 billion. Social Security represents approximately 40% of the income of the elderly, with 53% of married couples and 74% of unmarried persons receiving 50% or more of their income from the program. An estimated 169 million people paid into the program and 60 million received benefits in 2015, roughly 2.82 workers per beneficiary. Reform proposals continue to circulate with some urgency, due to a long-term funding challenge faced by the program as the ratio of workers to beneficiaries falls, driven by the aging of the baby-boom generation, expected continuing low birth rate, and increasing life expectancy. Program payouts began exceeding cash program revenues in 2011; this shortfall is expected to continue indefinitely under current law.

<span class="mw-page-title-main">Pension Benefit Guaranty Corporation</span> American government-owned company

The Pension Benefit Guaranty Corporation (PBGC) is a United States federally chartered corporation created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at the lowest level necessary to carry out its operations. Subject to other statutory limitations, PBGC's single-employer insurance program pays pension benefits up to the maximum guaranteed benefit set by law to participants who retire at 65. The benefits payable to insured retirees who start their benefits at ages other than 65 or elect survivor coverage are adjusted to be equivalent in value. The maximum monthly guarantee for the multiemployer program is far lower and more complicated.

<span class="mw-page-title-main">Pensions in the United States</span> Overview of pensions in the United States of America

Pensions in the United States consist of the Social Security system, public employees retirement systems, as well as various private pension plans offered by employers, insurance companies, and unions.

<span class="mw-page-title-main">Alliance for Retired Americans</span>

The Alliance for Retired Americans (ARA) is a 501(c)(4) non-profit organization and nonpartisan organization of retired trade union members affiliated with the AFL-CIO, which founded it in 2001. The group's membership also includes non-union, community-based activists. Its predecessor organization was known as the National Council of Senior Citizens (NCSC).

Teresa Ghilarducci is an American scholar on labor and retirement issues. She has advocated for government to extend occupational retirement plan coverage to all workers. She published Rescuing Retirement in 2018; the book makes the case for a Guaranteed Retirement Account that would supplement Social Security. In 2016 she wrote a popular book, How to Retire with Enough Money: And How to Know What Enough Is. One of her most recent books, When I’m Sixty Four: The Plot Against Pensions and the Plan to Save Them, investigates the loss of pensions on older Americans and proposes a comprehensive system of reform. Her previous books include Labor's Capital: The Economics and Politics of Employer Pensions, winner of an Association of American Publishers award in 1992, and Portable Pension Plans for Casual Labor Markets, published in 1995. Ghilarducci is an executive board member of the Economic Policy Institute, a member of the Retirement Security Advisory Board for the Government Accountability Office, court appointed trustees for the retiree health care trusts for UAW retirees of GM, Ford, and Chrysler and the USW retirees of Goodyear Tire. Ghilarducci won an Association of American Publishers award for her book Labor's Capital: The Economics and Politics of Employer Pensions in 1992. She previously taught economics for 25 years at the University of Notre Dame.

The Pension Rights Center is a nonprofit consumer advocacy organization established in 1976. Its stated mission is "to protect and promote the retirement security of American workers, retirees and their families."

<span class="mw-page-title-main">Defined benefit pension plan</span> Type of pension plan

Defined benefit (DB) pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum, or combination thereof on retirement that depends on an employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provide defined benefit plans, sometimes as a means of compensating workers in lieu of increased pay.

At retirement, individuals stop working and no longer get employment earnings, and enter a phase of their lives, where they rely on the assets they have accumulated, to supply money for their spending needs for the rest of their lives. Retirement spend-down, or withdrawal rate, is the strategy a retiree follows to spend, decumulate or withdraw assets during retirement.

According to the International Labour Organization, social security is a human right that aims at reducing and preventing poverty and vulnerability throughout the life cycle of individuals. Social security includes different kinds of benefits A social pension is a stream of payments from the state to an individual that starts when someone retires and continues to be paid until death. This type of pension represents the non-contributory part of the pension system, the other being the contributory pension, as per the most common form of composition of these systems in most developed countries.

Pensions in Spain consist of a mandatory state pension scheme, and voluntary company and individual pension provision.

<span class="mw-page-title-main">History of Social Security in the United States</span>

A limited form of the Social Security program began as a measure to implement "social insurance" during the Great Depression of the 1930s, when poverty rates among senior citizens exceeded 50 percent.

Issues in retirement security refers to growing economic concerns and societal issues over the ability of individual workers and other individuals in society to have an economically secure retirement.

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.