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Defining Retirement For Yourself
Retirement. The word conjures up images of a life of leisure: relaxing in a luxury condo by the ocean, rising early to hit the links, traveling cross-country in an RV taking in the sights. Seventy percent of Americans view retirement as a fundamental part of the American dream-and why shouldn't they? It's the state they've spent their entire working lives striving toward. No time of life is as laden with expectations, no subject more widely discussed, dissected, analyzed.
Need proof? Pay a visit to any bookstore, where volumes on retirement outnumber those on child rearing. Thumb through the latest magazines, where articles on how, why, and when to retire abound. Venture into cyberspace, where like-minded individuals post notes on electronic bulletin boards with names like "Basic Retirement Needs" and "Choosing Your Retirement Location." Turn on the TV, where images of active, silver-haired couples sing the praises of everything from vitamins to investment groups. Retirees have even been the subject of sitcoms (The Golden Girls) and films (Grumpy Old Men).
Simply put, retirement is a national obsession. That's fasclnating, when you consider it's only been a fixture of the American landscape since 1935.
A Brief History Of Retirment
Prior to the Civil War, retirement, at least as we think of it today, didn't exist. Before the 1860s, we were primarily an agricultural nation. Afterward, we began the great leap toward industrialization. While this transformation was wonderful if you happened to be a business owner, it proved considerably less propitiousfor the average working Joe. Mass production rendered the individual worker invisible, and ultimately dispensable. Work, which had once provided the employee with both an income and an identity, was reduced to a means to an end, providing nothing more than the obligatory paycheck.
By the time the 20th century rolled around, we were a country gripped by the fever of progress, ruthless in our pursuit of whatever would speed advancement and our persecution of whatever would slow it down. Unfortunately, older Americans fell into the latter category. The popular perception was that the older you were, the less efficient a worker you were likely to be (a myth that unfortunately lingers to this day one that we will explore later). As a result, older workers found themselves squeezed out of the workforce. The repercussions extended far beyond a mere assault on their dignity. One big question loomed in their minds: What were they supposed to live on?
The first attempt at an answer came in 1910, when President William Howard Taft began pushing the idea of pensions. He wasn't doing it because he was lying awake nights worrying about how retirees would eat. Taft, literally our largest president at over three hundred pounds, wasn't familiar with the concept of hunger. Rather, he was concerned with the nation's drive for industrial efficiency. Over the ensuing ten years, roughly two hundred different pension plans were created. By 1920, changes in tax law made pensions appealing not only to retirees but to businesses as well, and some businesses embraced the idea of retirement wholeheartedly. Unfortunately, too few companies were excited by the potential tax breaks: as late as 1932, fewer than 15 percent of workers were covered by a plan.
All that changed with the Depression. Faced with 13 million unhappy, unemployed Americans, FDR had to come up with a way to ensure that the nation's dire economic situation didn't explode into social unrest, a distinct possibility. His solution? Public pensions, which would get older men off the payroll and clear the way for younger men to work.
Thus was born the Social Security Act of 1935, which established retirement age as 65; benefits eventually expanded to include disability, welfare, and health insurance. Factor in the cost-of-living adjustments that were eventually added so benefits could keep pace with inflation, and you can see why the idea of retiring became attractive.
Of course, it didn't hurt that business, government, and the financial services industry all worked overtime to convince the public that retirement was something we all deserved, the reward for a lifetime of toil. Their joint efforts paid off. workers came to view retirement as a hard-earned paradise waiting for them, one in which they, and not "the Man," would be masters of their own fate.
Retirment In The 21st Century
Just as industrialization in the early 20th century precipitated a radical change in the way Americans came to view retirement, today another seismic shift in thinking is transforming our notion of what it means to be retired. The traditional cookie-cutter, one-size-fits-all notion of retirement is disappearing. Replacing it is the exhilarating idea that each of us is responsible for creating his or her own definition of retirement.
In other words, if you want to wave bye-bye to the company when you turn 65 and head down to Florida to tee off, you can plan to make that happen. If you want to leave the workforce at 55 and sail around the world, that's great. But if it makes you happy to stay in your home, work part-time, and spend your weekends working on that romance novel you've been itching to write, that's legit, too. It's all up to you.
This shift is born partly of necessity. Not to sound like the Prophetess of Doom and Gloom, but pundits have been screaming for years that the traditional sources retirees counted on to help fund their retirement-pensions and federal aid-just ain't gonna cut it, and the fact is, they're right. Many of us will probably need to do some kind of work after age 65 to accrue the added income needed to survive financially during those "golden" years.
But more than anything else, this paradigm shift is indicative of the realization...