Is Retirement Natural And Inevitable?

The concept of stopping to work at a certain age is a fairly recent invention. Yet it’s time for the concept to be re-invented to better suit today’s circumstances.

- Mark Hawes

Have people always retired? The short answer is no, which then begs the question: when did we start retiring? Is retirement sustainable? Let’s first consider what retirement is.

Generally, the word “retirement” has come to refer to leaving formal employment or stopping all income generating activities. Legally, retiring refers to your tax status and access to your retirement savings in terms of the post-retirement investment vehicle options available.

So have human beings always reached a point in their life where they stop earning an active income?

Historically, we simply did not live long enough to even consider the possibility to stop working. In the 18th century life expectancy was only 35 and rose to just above 50 when Alexander Fleming discovered penicillin in 1928. Consequently, people simply worked as much as they physically could until they died.

In addition, saving was incredibly onerous as economies were dominated by a subsistence lifestyle; feudal-style taxes were paid to maintain the central powers rather than channelled back to the citizens and financial systems for saving were rudimentary at best.

How, then, did retirement come about and why at age 65? The person generally credited with “inventing” retirement as we know it, is Chancellor Otto von Bismarck in 1883, but his objective was mostly to increase his popularity with his people, and to stem the tide of rising Marxism in Europe. He announced that he would pay a pension to any citizen of the age of 65. This was well past the life expectancy of the population in the 1880s and therefore a relatively safe bet for the government purse.