August 2nd 2022
Cody Lachner, CFP®
“Oh yes, the past can hurt. But from the way I see it, you can either run from it, or learn from it.” -Rafiki
History of Retirement
Retirement Plan Financial Advice
Retirement is a relatively new concept in the United States. It’s shocking but in the early 1900s,
life expectancies were only around age 30. With such a short life expectancy, leaving the
workforce to enjoy a life of leisure wasn’t really an option. Fast forward to 2020 and the average
life expectancy is 77¹. This leaves plenty of time to work a full career and enjoy a “second act”.
So what does the history of retirement in the US look like?
Social Security Retirement Planning
Age 65 was chosen as the initial full retirement age for a few reasons. According to the Social
Security Administration, about half of the existing pension systems in operation were using age
65 as their designated retirement age². Other retirement systems were using age 70. The policy
makers decided, at the time, age 65 was the best starting point given tax revenue. Over time,
US retirement ages for Social Security have gradually increased due to increasing life
expectancies and benefit liabilities.
How did 65 become the retirement age?
Retirement Plan Financial Advice
Age 65 was chosen as the initial full retirement age for a few reasons. According to the Social
Security Administration, about half of the existing pension systems in operation were using age
65 as their designated retirement age². Other retirement systems were using age 70. The policy
makers decided, at the time, age 65 was the best starting point given tax revenue. Over time,
US retirement ages for Social Security have gradually increased due to increasing life
expectancies and benefit liabilities.
How do I retire?
This is sort of a loaded question as it depends on so many variables that are unique to your
individual situation. In a nutshell, you retire by having enough income to cover your expenses
for many years without the obligation to keep working. Income in retirement could be earned
through Social Security, pensions, investments, part-time work, etc.
It’s important for your retirement income to keep up with rising cost of living. This is a massive
hidden cost of retiring. Also, consider the fact that health care expenses have continued to run out of control.
¹https://www.cdc.gov/nchs/fastats/life-expectancy.htm
²https://www.ssa.gov/history/age65.html
Retire Now with BBK Wealth
Retirement, especially now, is tough. Let us lend you a guiding hand.
We provide complete, rapid and uncompromising support when you need it and will help you identify all the sources of income and related tax savings.
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RETIREMENT FINANCIAL PLAN ADVICE ♦ SOCIAL SECURITY PLANNING ♦ RETIREMENT TAX PLANNING ♦ RETIREMENT INVESTMENT PLANNING
