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The History of Retirement


As with many things in life, retirement is a milestone that continues to evolve. Most of us spend years dreaming about and planning for our Golden Years, but have you ever wondered how or when retirement was invented? While widespread retirement did not occur globally at the exact same time, in most developed nations it has only been around since the 1880s.

When Was Retirement Invented?

 It might sound a bit funny to consider that retirement is something that had to be invented. However, the average lifespan in the mid to late 1800s was around 40-years-old. What changed drastically during this timeframe is that significantly more people were living beyond the slowly increasing expected lifespan. With more adults living into their 50s and 60s, this left the younger generations struggling to find steady employment. It also left employers with productivity concerns. For example, they may have a factory worker who had been employed with them for 20 or 30 years who in those days would have been disrespectful to terminate due to their age. However, paying someone a full hourly wage whose productivity was lacking wasn’t working either.

Slowly but surely, countries started providing government or company funded pensionand retirement plans, as well as a suggested or required age at which they should stop working. In most cases these pensions were enough to live comfortably, but often required budgeting. Keep in mind, this was a time when parents often lived with children, or children and their families still lived at home. This is also when the U.S. governments began offering a variety of paid pensions to injured war veterans, and depending on where you lived, possibly the widows of the dead. Social Security was not invented until 1935.

Retirement Was a Newfound Luxury for Those Who Saved

While retirement pensions in the late 1800s and early 1900s weren’t something the average person could live extravagantly from, those who were able to save additional money for retirement were able to live quite comfortably. Those who had inheritances or companies who offered above-average pensions plans began referring to retirement as their “Golden Years.” Hard working adults started to embrace retirement as a time to travel and enjoy life. By 1910, the migration south to sunny Florida began the still popular goal of moving to Florida to retire or having a winter home in Florida and a summer home in a home state.

The Invention of Modern Retirement Options

By the 1970s average life expectancy rose to 70 years old. As life expectancy continued to increase, companies found themselves going bankrupt trying to honor the competitive pensions provided to their retirees. At this time, it was not unheard of for a company to go bankrupt and for their retirees to lose their pensions. Even with Social Security it was clear that other retirement solutions were required. The 70s are when IRAs and 401ks were invented, and other investment options continued to be utilized for retirement savings.

At present day Generation X and younger are left wondering if the Social Security insurance they pay into will be available for them to benefit from. Even if Social Security is available, for most it will provide a supplemental income. To ensure a comfortable quality of life in retirement, planning is a must. This is in addition to your company retirement plan.

Many simply aren’t sure what to prioritize when planning for retirement or even when to start saving. There is no one-size-fits-all solution to retirement plan, which is why I would like to invite you to schedule an initial consultation to discuss your financial goals.


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The views expressed in this blog post are as of the date of the posting and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Linden Oak Wealth Partners unless a client service agreement is in place.

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