Thougts about retirement
26/03/15 04:39
The idea of retirement is not new. It has been around for a long time. It was 13 B.C. when Roman Emperor Augustus began paying pensions to Roman Legionnaires who had served 20 years. According to Rank Eich, who, in 2009, wrote a history of pensions, Augustus’ plan was financed by regular taxes and later by a 5% inheritance tax. It is difficult to know, from the perspective of a couple of thousand years later, how big the impact of retirement was on the overall society. One place where I looked cited the average life-expectancy in Rome at the time around the age of 25. It’s pretty hard to get in your 20 years before the age of 25. This statistic, however, must be skewed by the very high infant mortality of the time. Legionnaires were, likely, in better health than the general population. They, of course, faced the risks of battle, which were lower than in the industrial age, say around 10 to 25% of Roman soldiers died in battle. Being a commander, or Centurion, would have reduced the risk of battle death. If the Legionnaire was appointed at 20, he’d have his 20 years in by 40 and then might live another ten or even twenty years if he didn’t die of STDs, dysentery, plague, or long-term effects of combat injuries. The 5% inheritance tax was probably sufficient to more than fund the pensions for the “retired” soldiers.
The concept of paying pensions to soldiers caught on early in the history of Europe. In most cases, these were motivated by high injury rates. Soldiers were not capable of working at some of the jobs that their peers without military experience did. By the 16th century, Britain and several other European countries offered pensions to officers and some offered pensions to general troops.
The practice of government paid pensions to disabled soldiers gained widespread support following the Civil War.
Eich’s history cites an official with the London port authority as the first civilian to be paid a pension. In 1864, the retired public servant was paid half of his salary, which was deducted from the pay of his replacement. Hmm. . . there are some obvious reasons why that system didn’t catch on. On the other hand, the life expectancy after retirement was relatively short.
The basic plan for most of the world’s history, however, was simple. Work for an income until you die or become disabled. That plan, true for most of the world’s workers for most of history is still the case in many societies around the globe.
My grandfather was the first in our family line who enjoyed something like retirement. His father had died while working the family farm. That was typical for his generation. In 1880, 78 percent of American men worked past the age of 65. When his father died, my grandfather took over the farm. He later sold it and bought a gas station, so he worked about half of his career as a farmer and half as a small business owner. He was able to retire because of the Social Security system, created in 1935. He lived long enough to draw Medicare benefits, added in 1965, for part of his retirement.
Of course my grandfather wasn’t totally supported by public funds in his retirement. He lived off of savings and the proceeds from the sale of his business.
Retirement was the expectation for my father’s generation. My father began to talk seriously about retirement at the age of 50 or so. He was an entrepreneur and small business man and he had several ventures that he carried on for 25 or so years. He was the principal operator of our airport and ran a flying service for 25 years before selling the aviation portion of his business. Alongside that, started several years later, he was a John Deere dealer and ran a feed store for a 25-year period. Most of that business was sold a couple of years before his death. My father didn’t live to 65. He died before his 60th birthday. At the time of his death, he was semi-retired, with income from savings, the sale of portions of his businesses and income from rental properties and a leasing company which owned all of the accounts receivable from his prior businesses. He did leave a widow, who drew his social security for three decades after his death.
I think that retirement will be quite a bit more “mushy” for my generation. Some of my peers are already retired, having been successful in their vocation, prudent in their savings, and with the support of the Social Security system. Others, like me, are still working and most of us don’t see anything particularly significant about the age of 65 as the point of retirement. Most of us can realize financial benefit by not drawing on retirement funds until age 70. Many of us have excellent health and can expect to live well into our 80’s or 90’s. Our motivation to retire at a specific age is not as high as those who have more fragile health conditions. I think that my generation will see retirement ages spanning over several decades of age.
It is very unclear what will be the case of our children. Our son-in-law is a career military person. I expect military pensions to continue and he expects to retire from his military career at around 20 years of service. He’ll be a young man when he has his 20 years in and fully expects to work at some other job for many years after beginning to draw his military pension, enabling him to save for a more full-time retirement down the road. Our daughter, his wife, is a civilian employee on the base and will have both Social Security and participates in a shared retirement savings plan with her employer.
Our son works for a large hospital corporation where, in addition to Social Security, he and his employer contribute to a private retirement savings fund.
But retirement isn’t only about money. It also has to do with meaningful work. There is plenty of work that is volunteer for which one doesn’t earn financial reward, so retirement can be a very meaningful time. On the other hand, working to support oneself can also be meaningful.
It seems that now is a good time to re-think the concept of retirement. Obviously, I keep thinking about the topic. Fortunately, I have the luxury of a steady job that gives me the freedom to think and plan and consider my options.
The concept of paying pensions to soldiers caught on early in the history of Europe. In most cases, these were motivated by high injury rates. Soldiers were not capable of working at some of the jobs that their peers without military experience did. By the 16th century, Britain and several other European countries offered pensions to officers and some offered pensions to general troops.
The practice of government paid pensions to disabled soldiers gained widespread support following the Civil War.
Eich’s history cites an official with the London port authority as the first civilian to be paid a pension. In 1864, the retired public servant was paid half of his salary, which was deducted from the pay of his replacement. Hmm. . . there are some obvious reasons why that system didn’t catch on. On the other hand, the life expectancy after retirement was relatively short.
The basic plan for most of the world’s history, however, was simple. Work for an income until you die or become disabled. That plan, true for most of the world’s workers for most of history is still the case in many societies around the globe.
My grandfather was the first in our family line who enjoyed something like retirement. His father had died while working the family farm. That was typical for his generation. In 1880, 78 percent of American men worked past the age of 65. When his father died, my grandfather took over the farm. He later sold it and bought a gas station, so he worked about half of his career as a farmer and half as a small business owner. He was able to retire because of the Social Security system, created in 1935. He lived long enough to draw Medicare benefits, added in 1965, for part of his retirement.
Of course my grandfather wasn’t totally supported by public funds in his retirement. He lived off of savings and the proceeds from the sale of his business.
Retirement was the expectation for my father’s generation. My father began to talk seriously about retirement at the age of 50 or so. He was an entrepreneur and small business man and he had several ventures that he carried on for 25 or so years. He was the principal operator of our airport and ran a flying service for 25 years before selling the aviation portion of his business. Alongside that, started several years later, he was a John Deere dealer and ran a feed store for a 25-year period. Most of that business was sold a couple of years before his death. My father didn’t live to 65. He died before his 60th birthday. At the time of his death, he was semi-retired, with income from savings, the sale of portions of his businesses and income from rental properties and a leasing company which owned all of the accounts receivable from his prior businesses. He did leave a widow, who drew his social security for three decades after his death.
I think that retirement will be quite a bit more “mushy” for my generation. Some of my peers are already retired, having been successful in their vocation, prudent in their savings, and with the support of the Social Security system. Others, like me, are still working and most of us don’t see anything particularly significant about the age of 65 as the point of retirement. Most of us can realize financial benefit by not drawing on retirement funds until age 70. Many of us have excellent health and can expect to live well into our 80’s or 90’s. Our motivation to retire at a specific age is not as high as those who have more fragile health conditions. I think that my generation will see retirement ages spanning over several decades of age.
It is very unclear what will be the case of our children. Our son-in-law is a career military person. I expect military pensions to continue and he expects to retire from his military career at around 20 years of service. He’ll be a young man when he has his 20 years in and fully expects to work at some other job for many years after beginning to draw his military pension, enabling him to save for a more full-time retirement down the road. Our daughter, his wife, is a civilian employee on the base and will have both Social Security and participates in a shared retirement savings plan with her employer.
Our son works for a large hospital corporation where, in addition to Social Security, he and his employer contribute to a private retirement savings fund.
But retirement isn’t only about money. It also has to do with meaningful work. There is plenty of work that is volunteer for which one doesn’t earn financial reward, so retirement can be a very meaningful time. On the other hand, working to support oneself can also be meaningful.
It seems that now is a good time to re-think the concept of retirement. Obviously, I keep thinking about the topic. Fortunately, I have the luxury of a steady job that gives me the freedom to think and plan and consider my options.