The Realities Of Retirement: Different Today Than They Were In The Past

By Robert R. Julian of Retirement Planning Consultants. His firm works with organizations to help them with their efforts to inform and educate their employees on retirement related issues. For more information, phone 607.255.4405 or email rrj1@cornell.edu.

In the first half of the 20th century, very few workers enjoyed a fun-filled, long and comfortable retirement. Why not? Well, pension plans were not common, Social Security didn't exist before 1935 and, besides, workers didn't live that long. I don't know how many of you will remember the phrase..."he died with his boots on, " but it was a phrase which basically stated that most workers died while still working.

The life expectancy of a man born in 1900 was about 48 years and the life expectancy of a woman born in that year was about 51 years. Lets' move forward for about 80 years. The life expectancy of a man born in 1980 is about 70 years and the life expectancy of a woman born in 1980 is about 78 years.

In 80 years, the life expectancy for men increased a total of 22 years. The life expectancy for women increased 27 years.

As we moved into the second half of the 20th century, things changed. Social Security was paying benefits to retired workers. Labor unions bargained for and they were able to obtain pensions, health care and other benefits from employers. New laws enacted by legislators made it difficult for employers to get out of promised benefits. The federal government provided insurance for employees in case employers went broke and couldn't make pension payments.

Today, as we look back in history, the period from 1975 to 2000 is beginning to look like the golden age of retirement in America. It almost makes you want to break out in song and sing, "Those were the good old days."

Why is it then, after all of these accomplishments, some people are beginning to feel that the "Reality of Retirement" for many of today's and tomorrow's workers is going to be quite different from the retirement that existed for good number of yesterday's retirees?

For beginners, let us mention five main themes.

Private pensions from employers have declined drastically.
Today's workers who save and invest in a 401k, 403(b), 457 defined contribution plan are not doing well with their savings or investments.
The future of Social Security is uncertain.
Retiree medical insurance plans are being dropped or cut back.
There is doubt that the government can adequately fund a growing Medicare program.

These themes will impact retirement plans and the "Reality of Retirement" for employers and employees. The question you should be asking is, "What steps is my company taking to ensure that our employees understand today's "Reality of Retirement?"

Other articles by Robert Julian: How Can We Get All Of Your Employees To Participate In Your 401k?

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