Retire… Are you done yet?

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You’ve all seen ads for retirement. Ads for planning and preparing to retire, investing, rolling over your 401k, making sure you’ve saved enough money, and warnings that retiring is going to cost you more than you think. There is only one problem with these narratives. They make the assumption that retirement means no longer contributing to the world while receiving a paycheck.

The Concept of Retirement
Before the 1880’s, there was no institutionalized concept of retirement. Then in 1889, German Chancellor Otto Von Bismarck invented retirement when he announced that he would pay a government pension to all non working Germans after they reached 70 years of age. Bismarck wasn’t trying to spread goodwill, but rather stave off the expansion of socialism in Germany. The retirement age was later lowered to 65, but no one really benefited because life expectancy during that time was about 46 years.

Retirement was an unknown concept in early America. For a long time the American economy was dominated by farmers who worked till their health gave out and then passed the business to their sons. That changed as the Industrial Age dawned and machinery began to replace manpower. All of a sudden, workers were disposable and work was depersonalized. The lexicon also began to change from “craft” and “vocation” to “occupation” to “job” and “work.” The older workers slowed down assembly lines, took more sick days and struggled to work the machines.

Labor unions quickly embraced the idea of retirement because forcing out the older workers gave them the opportunity to deliver the jobs and job security they were promising to younger men. Therefore, the older workers were pushed to retire and were easily replaced by younger workers who had more energy and could be more productive.

Retirement became more acceptable after 1905 when Dr. William Osler, one of the nations most prominent physicians, presented scientific research that any man over 40 years old was virtually useless to society. Osler went on to say that people between 40-60 were entirely incapable of working and a drain on society because of their inelastic minds.

There was only one problem with retiring the aged: What would the retirees live on? And so came the world of pensions and social security. In 1935, the Roosevelt administration introduced Social Security and set the retirement age to 65. Why 65? They looked to Germany as their model. Life expectancy at that time was 62 years.1

Pushing Out the Old
I heard a story about a surgeon at the Mayo Clinic. He was at the peak of his career at 65 and it was the hospital’s policy to force surgeons to retire at 65 years. Let me ask you, who would you rather perform surgery on you? A doctor who has honed his skill for decades and has performed the procedure 5,000 times or a new doctor who will practice on you and potentially make mistakes? The point is, we still have a mentality reminiscent of the Industrial Age, of pushing out the old to make room for the young. Does it make sense for us to retire those who are rich in intellectual capital and experience?

Rethinking Retiring
It is interesting that when we go back to our earliest written literature, we see references to the institution of marriage, and other natural processes such as birth and death, yet we see no mention to the concept of retirement. Retirement is an event that doesn’t exist in nature, making it neither an organic or natural concept.

Mitch Anthony’s book The New Retirementality suggests that the concept of retirement was a shortsighted political machination and social manipulation that is no longer relevant and is hopelessly out of touch with our times. Consider the fact that though life expectancy continues to increase, the retirement age and social security policy has remained at 65, unchanged for the past 80 years. People are now living decades past retirement, something Bismarck never dreamed!

Moreover, many retirees realize that retirement isn’t as idyllic as they thought. Reuters-Ipsos surveyed 7,727 adults about their employment status and found that out of those who identified themselves as retired, 30 percent said that if a job became available they would rejoin the workforce.2

Perhaps it is time to develop a new mind set regarding retirement. By definition, to retire means to withdraw, to go away, to fall back or retreat. But are we ready to do that? Are you really done yet? After all, there is only so much golf that one can stand.

Senator Theodore Green once said, “Most people say when you get old you have to give things up, but I think we get old because we give things up.” Green was 98 years old when he retired in 1966. While everyone is asking how much money you have saved, I want to know if you are ready to be done yet? If you are ready to give things up.

Please note: This post was previously posted on July 29, 2015.

Footnotes:
1http://www.usnews.com/debate-club/should-the-medicare-eligibility-age-be-raised/we-should-encourage-americans-to-keep-working-not-retire
2http://www.cnbc.com/id/101937488

Written by Jaimie Blackman

Jaimie Blackman

Jaimie Blackman has created Sound Financial Decisions ™ powered by MoneyCapsules®, to help guide business owners through the complexities of succession planning.

Jaimie writes “Smart Succession”, a monthly column in Music Inc., and also writes a bimonthly column for Canadian Music Trades magazine. He has spoken at NAMM U Idea Center, and at Yamah’s Succession Advantage.

As a financial literacy educator he has taught at New York University and has lectured at the 92nd Street Y, Marymount Manhattan College, and CUNY.

As President of BH Wealth Management, Jaimie also helps his clients implement investment and insurance solutions which are aligned to their personal values. Visit bhwealth.com to learn more.

To subscribe to Jaimie’s Succession Success: Insights for Music Retailers, visit moneycapsules.com.

The purpose of this post is to educate. Our content should not be construed as advice. If legal, tax or other advice is required by the readers, professional advice should be sought.

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