In the scope of human history, retirement is a very modern concept. Until the end of the 19th century, it simply didn’t exist.
Until then, anyone who was of working class or was engaged in subsistence living had no choice but to keep working until they were either no longer physically able to do so, or they died. Either way, there was no thought of spending a few carefree years in an easy retirement.
It is generally accepted that the idea of a national retirement age was first proposed in 1881 by Chancellor Otto von Bismarck, who historians believe was under pressure from Marxist unrest spreading across Europe. To appease demands for socialist reforms, he suggested that the government should provide a pension to all people over a certain age so that they no longer had to work.
Initially, he set this age at 70, which was more or less the average life expectancy. In other words, nobody was expected to remain on pension for very long.
This was later lowered to 65, which was also the age adopted by the US when it passed its Social Security Act in 1935. At the time, the life expectancy of American men was 58.
It goes without saying that things have changed dramatically since then. According to the World Health Organisation, the average life expectancy in Germany is now 81, while in the US it is 79. And these numbers are climbing.
Yet retirement age has stayed the same. Once you reach 65 you are expected to pack your bags and find a way to live off whatever you have managed to save up during your working life. While many countries, including South Africa, have some sort of social security in place that ensures that the elderly aren’t consigned to absolute poverty, there are very few places in the world where the state will guarantee you a comfortable retirement.
Today it is quite possible to enjoy good health for 20 or 25 years after you retire, and you could live for another 10 or 15 years beyond that. In other words, you could work for 45 years, and need to support yourself for another 40 years from what you’ve earned.
Under these circumstances, it is perhaps odd that the concept of retiring has not changed much in over a hundred years. It is still largely seen as a single, broad phase of life, characterised effectively by the idea that you are no longer working.
It is however difficult to see how this can be sustained in the current environment. Speaking at a recent Alexander Forbes retirement seminar, Anne Cabot-Alletzhauser, the head of the Alexander Forbes Research Unit, went so far as to say that the idea may fall away altogether.
“Retirement is a fabrication,” she said. “It’s a construct. It’s not real. It’s not like suddenly the bell rings and you can no longer function. In the next 20 years I suspect retirement will evaporate. We won’t even hear the word.”
She believes that people should rather be preparing themselves for a ‘multi-stage life’, where the end of one’s formal working life only leads to the start of something else. This is not just because many people will need to continue to generate an income in order to support themselves and augment their savings to mitigate against living longer, but also because at the age of 65 most people are still not only able to work, but want to keep doing so.
Some medical research even suggests that ending work abruptly may be detrimental to your health. This is because, psychologically, our sense of worth and purpose is often tied to our jobs. To prevent this loss from having a serious impact, we need to think not of retiring from something, but rather retiring to something.
An increasing number of people are becoming entrepreneurs later in life. They are starting their own businesses either to follow a path they have always wanted to try, or to use the experience and expertise they built up over their working lives.
Technology is also opening up many new ways to market one’s skills. There are a number of online platforms where you can register as a freelancer and receive ad hoc work.
For others, leaving work presents an opportunity to become more involved in social or community causes. Many are becoming mentors to young people just starting out in their working lives.
What all of this points to is that retirement as an event is falling away. At the age of 65 many people are still as mentally fit as they were at 20, and they need some sense of purpose to keep them going.
As this increasingly becomes the norm, reaching ‘retirement age’ will no longer be seen as an endpoint. Instead it will be seen as a time at which we transition to a new kind of life, perhaps where we slow down a little or attempt something new, but one where we still see ourselves as working in some way.