Liz's Blog

One of the “givens” I often see in discussions about retirement is the idea that previous generations didn’t have much of one. Great-grandpa got to the end of his working life, got his gold watch and keeled over.

Short or non-existent retirements certainly were the rule before the 20^th century. People usually worked until they died or until they were physically unable to continue. There were some exceptions; Civil War pensions allowed older veterans to leave the workforce earlier and some companies launched mandatory retirement policies in the late 1800s. The fact remains, though, that many people ended their lives in abject poverty because they could no longer work. That was what prompted the creation of Social Security in the 1930s.

It’s not true, though, that people in the 20^th century died shortly after turning 65. That’s obvious from this table of historical life expectancies compiled by the Social Security Administration.

[table id=1 /]

Check out the last two columns. Even in 1940, men could expect to nearly 13 more years and women nearly 15. Life expectancies at age 65 have certainly gotten longer (20% longer for men, 33% for women) since 1940. The bigger change has been in the percentage of people making it to 65. Improving safety standards and better health care meant a whole lot more people got a shot at having a retirement.

(And these figures don’t account for reductions in infant and childhood mortality, since the numbers in the second two columns reflect adult survival rates from age 21 to 65.)

Another big change came in 1961, when the earliest age for collecting Social Security benefits dropped to age 62. That plus longer life expectancies contributed to lengthier retirements.

The trend seems to be reversing. The average retirement age for men has risen in the past 20 years from 62 to 64. The average retirement age for women also increased from 59 to 62.

That still leaves a lot of years to support yourself, which is why delaying retirement and working part-time in retirement are often good strategies for making your savings last.