Funding retirement is right up there for the over 50s as a major concern for their futures as many developed countries go through rebalancing their economies because state welfare is becoming unaffordable.
Britain is the outstanding example. The cost of the National Health Service and welfare benefits have become too much for the economy to bear as people live longer and fewer contribute into the tax system to pay for the benefits.
But retirement is an artificial concept that was invented comparatively recently and is just undergoing a remodelling to match the times.
Before the late Industrial Revolution in the 1800s, retirement did not exist.
No one saved for a pension and the state certainly did not pay any benefits. Everyone had to fend for themselves.
History of pensions
Instead of retirement, everyone had to contribute economically and a gradual winding down evolved as older workers took on lighter jobs.
This remained true as manufacturing took over from agriculture as the main economic sector.
Then, new ideas clicked into place in the 20th century. Businesses came up with the idea of paying older workers to leave their jobs so younger fitter workers could take over and maintain productivity.
The first pension plan was started by the Baltimore and Ohio Railroad in 1880.
Other businesses took on the concept, encouraged by governments who offered tax and other financial incentives to firms with pension plans.
This culminated with the US deeming 65 as the official retirement age in the 1930s. This was picked up in Britain as state retirement age as the welfare state took shape after the Second World War and then spread to many other countries.
Changing attitudes
The point here is retirement and the state pension age are arbitrary.
As governments roll-back the official retirement age into the late 60s – and warn that today’s generation may work into their mid 70s – many are losing that state safety net that lets them give up work from as young as 55 years old.
Retirement is not a right, but something many will have to work hard and save for through much of their lives.
Attitudes have to change. Workers have to understand that in the end, their retirement will be based on what they can afford.
The days of world cruises, three-month holidays abroad and a life without money worries for pensioners has gone for good except for those who have significant savings.
