Retirement Age History

Instructor: Christopher Muscato

Chris has a master's degree in history and teaches at the University of Northern Colorado.

Retirement is the goal of nearly all working people. In this lesson, we'll talk about the history of retirement in the United States, and see how the retirement age has changed over time

Retirement

It's been called the world's longest coffee break, and it's that moment we all start planning for as soon as we start working. Retirement is the period in life when a person no longer has to work, generally after having worked for many years. How is this possible? In many nations today, including the United States, retirees are at least partially sustained by Social Security, government welfare paid for by the payroll taxes of working citizens. It's a nice idea -- your paycheck supports the retired, and someday younger workers will support you. As of right now, the average age of retirement is 62, but it wasn't always this way. For some, life's great coffee break was a little more elusive.

Retirement is an expectation for many people today.
Retirement

Retirement Age through the 1920s

Let's start by looking at retirement age around the start of the 20th century. Up through that point in American history, there was no concept of social security or guaranteed retirement. The American people wanted their government to generally stay out of their lives, but this meant eliminating any hope for welfare programs. So, retirement wasn't really an option. People worked until they were physically unable, and then they usually had to rely on their children for support. If you were rich, your family had enough money to sustain you, but this was a much bigger struggle for working class families.

The early 20th century was a time of great change, as reform movements became major features of society for the first time since the Civil War. Gradually, many people began demanding more government involvement in the economy and in their lives. To prevent workers' grumbling from turning into strikes, many companies started offering pensions, or retirement benefits that provided extra financial security to those unable to work. This was still a relatively new idea, however, and by 1919 only 15% of American workers had pensions.

The Rise of Social Security

Then, in 1929 the stock market crashed and everything changed. The Great Depression completely changed the conversation. Whereas before people wanted the government to be somewhat involved in society, now they realized they absolutely needed government aid. For the first time, American people began to see welfare as a duty of the government. President Franklin D. Roosevelt agreed and used government power to create unprecedented welfare programs.

Social Security was introduced under FDR.
FDR

In 1935, the government passed the Social Security Act, establishing government welfare for retirees and setting a formal age of retirement at 65. This number is important. In 1935, the average life expectancy was on 61.7 years, but that included a high rate of infant mortality. A little over half of people who survived to age 21 were expected to make it to 65, and were expected to only need social security for about 12 years before passing away. With many Americans working in rough conditions, few could work past 65 anyway, so this was a good age for retirement. People at 65 needed welfare, and since they were only supposed to live into their 70s, it wasn't a huge strain on the government.

Retirement after WWII

The concept of a guaranteed retirement was great, but this really became relevant was after World War II. Wartime production fully ended the depression, salaries increased, and payroll taxes poured in. It was in the 1940s that most Americans could really count on retirement as a guarantee. In the 1960s, social security was amended so that people could choose to retire at 62, not 65, for 80% of the benefits. Those extra three years proved appealing to many, and to this day, 62 is still the average age of retirement.

The system hasn't been perfect, of course. In the 1970s, the government had to adjust the amount that retirees were paid to compensate for inflation. They also had to deal with a growing problem of companies using social security to force elderly workers into retirement. In 1977 the Age Discrimination in Employment Act made it illegal to force anyone under 69 into retirement. This was amended to prohibit all forced retirements in 1986.

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