Is Retirement Still A Viable Concept?


Every so often I am returning to the roots of Satisfying Retirement and rerunning an older post that deals strictly with the nuts and bolts of retirement.  If you have yet to leave full-time work and have questions about what is ahead, I trust these posts will help you. If already retired, there is never a bad time to review what got you there and how to improve your experience.

Sometimes I wonder if the whole concept of retirement is destined for the dustbin. The idea of retiring from work has not been part of our world for much more than one hundred years. Leaving work permanently didn’t become something that most thought about until the years after 1935 with the beginning of Social Security and strong employer pensions. Certainly, my parent’s generation welcomed retirement, and the majority of folks my age aspire to that part of life.

But, over the last few years I have watched at least five trends that seem to raise questions about retirement’s appeal, or even viability. Consider these circumstances:

1. Savings rates can’t possibly support full retirement. For those 45-54, the median amount saved for retirement is $100,000. For 35-44 year olds, the median saved is only $61,000. Even forgetting about retirement savings for a moment, 72 million Americans have no emergency savings at all. That is a whole bunch of folks who are one paycheck away from financial hardship or ruin, much less retirement.

2. The support of company pensions has all but disappeared. The defined benefit type plan is but a fond memory for most. Companies have been cutting the contributions and scope of pension plans for the last few decades. Poorly funded 401(k) accounts, or no pension at all, are more the norm. Future generations will likely never experience the option of a robust pension.

3. The likelihood of cutbacks in Social Security benefits and means testing for payments are virtual certainties in the years to come. There are too many folks retiring and too few workers to fund their Social Security payments to keep the system operating the way it does today. 

4. The amount of money needed to retire continues to rise. Thirty or forty years ago someone with one hundred thousand dollars in savings and investments, a decent pension, medical coverage, and Social Security could look forward to a comfortable retirement. Then, the “magic” figure became $500,000, quickly followed by one million dollars. Today, retirement gurus claim you need 2 million dollars to have a shot at a pleasant time away from work. Needless to say, 2 million is a number very, very few will accumulate; one million is impossible for most. 

5. Maybe just as important, the interest in continuing to work is growing. Due to financial concerns (see #1 above), wanting to continue doing something that is satisfying, being fearful of free time with nothing to do, or anxious to start a new business and make a lifelong dream real, the percentage of those who say they have no plans to stop working, or working well past the typical target of 65, is increasing. Some studies show it is nearly 33% of all workers. 

I am now wondering about the reality of retirement in the decades to come. Has our world changed to the point where retirement isn’t something the majority will ever experience, either by choice, or circumstances? Within the next few generations will retirement be as uncommon as it was 60 years ago?

What do you think?