While many people are waiting until they can retire and enjoy the finer things in life, retirement hasn’t always been around for seniors. The first recorded instance of retirement in America occurred in the 17th century when a colonist was injured protecting the town and could no longer work. Before this time, most Americans continued to work until they were no longer physically able.
Faced with the threat of Marxism, German Chancellor Otto von Bismarck offered a government pension to any German citizens over 65 who were not working. This action established the average age of retirement that still exists today. Back in the United States, army retirement pensions began in the 1900s for disabled and decorated veterans who chose to retire after serving.
After physician William Osler gave a medical reason for choosing retirement, the idea began to take hold in more than just army circles. The Industrial Revolution meant more people were moving from farms to cities to work in factories. This meant older adults not only had to keep with their younger counterparts in a fast-paced and ever-changing environment, but also with shoddily constructed machines and conveyor belts. The American Express railroad was the first private company to offer a retirement arrangement in 1875. Banks and manufacturing companies soon followed suit, offering corporation-sponsored pension plans.
When the Great Depression rolled around, tension between younger and older workers began to erupt as jobs became slim, and a movement for a mandatory retirement age took hold. Under the proponents’ plan, retirees would receive $200 a month paid by the government. President Franklin D. Roosevelt passed the Social Security Act of 1935 which assured a lifelong income for retirees over 65 and individuals with disabilities. It was funded by a 1% tax on the first $3000 of an employee’s income. Today, the social security tax rate is a little over 7% required from employers and employees.
By World War II, private employers began offering generous pension plans to attract employees in a tight labor market (because so many citizens were military employees or soldiers overseas). During this time, the number of people taking part in corporation-sponsored pension plans increased to around 30% of the workforce.
Generous offerings from companies didn’t change the fact that many seniors continued to work past the age of 65. According to a Labor Force Participation Rate study, half of men over 65 were still working in the 1940s. However, retirement communities that began to crop up around the United States in the 1920s and 1930s and the invention of the television and highways systems brought luxury to the American forefront. Between the 1950s and 1980s, the same study showed only 24% of men over 65 remained in the workforce.
More recent legislation provides retirement plans with tax breaks like the 401(k). Nowadays, retirement is a much-appreciated end to a career and a chance to explore new hobbies, learn new things, and enjoy life. The residents at Parc Communities know how to retire in style, working hard at play!
For more information on Parc Communities’ luxury senior living communities or to schedule a tour, contact our office. You can also connect with us on Facebook and Twitter!