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March 14, 1988
"The New Retirement Class"
San Jose Mercury News
By Timothy Taylor
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MY mother mentioned a few weeks ago that she and my father are thinking about retiring from their jobs, at least for a few years, and joining the Peace Corps. They are in their early 50s. My only uncle has decided to retire at the end of this summer. He's in his middle 50s.

I'm a little jarred by the notion of people retiring in their 50s, but I'm apparently about a century behind the times on this trend.

In 1900, a 40-year-old man could expect to live until age 68. However, 68 percent of the men over age 65 either had jobs or were looking for them. (They were "in the labor force," economists would say.) Of those men between the age of 45 and 64, 92 percent were in the labor market. For the typical worker, retirement generally meant that you were sick, or rich, or both.

By 1950, the situation had changed. Life expectancy for a 40-year-old man had risen to 71 years, but only 41 percent of the men over 65 were in the labor force. However, 88 percent of men from the ages of 45 to 64 were in the labor force. Retirement was becoming an option, if you lived long enough.

Today, the average 40-year-old man can expect to live to be 74, but only 64 percent of the men over 65 are working or looking for work. In addition, only 68 percent of men 45 to 64 were in the labor force. Retirement after 65 has become the expectation, and retirement before age 65 is becoming ever more common. The federal Bureau of Labor Statistics predicts that these trends will continue.

(For women, the figures are somewhat different. The trend toward more women of all ages taking jobs outside the home has counterbalanced the trend toward earlier retirement. In 1890, for example, only 18 percent of women were classified as "in the labor force." That figure had risen to 30 percent by the 1950 census and now stands at 55 percent.)

The United States is seeing the rise of an entirely new class, the healthy middle-class retiree. One of my grandfathers died before he was 40, and the other died a month after his retirement. Today, the expectation has become that the typical worker will retire at age 65, if not sooner, and enjoy a happy decade or two of good health.

This development is cause for rejoicing. My uncle has a number of health problems, and I am thrilled that he and my aunt will be able to take their long-planned trip to all the national parks while he can enjoy hiking through them. I'm delighted (if a little shocked) that my parents can think about the Peace Corps. I'm pleased that my grandmothers can live comfortably. It says wondrous things about the economic power and benevolent institutions of this country that lengthy retirement has become a possibility for so many.

But the creation of a new retirement class also causes me some worries.

First, older workers often have that unique feel for their job that cannot be taught, but must be learned through experience. I worry about what will happen to the economy if many of the most experienced workers choose to retire at an ever younger age.

Second, I worry about the effect on political life of a huge group of retired citizens. On my optimistic days, I predict that the retirement class will be a force for wisdom and stability in the nation's political life, giving their time and energy being well-informed and active in their communities. On my pessimistic days, I see the retired class forming a self- indulgent voting block that concentrates on taxing the youngsters to spend on the oldsters. Which will it be?

Finally, I worry that the current retirement class is a historical accident, created by soaking members of the younger generation. Today's retirees receive their Social Security and Medicare benefits courtesy of the baby boom generation, a case of a populous younger generation supporting a smaller elderly generation.

But in the future, a smaller group of workers will be supporting a growing retired class. In 1950, for example, there were 16 workers for every Social Security recipient. Today, there are three workers for every recipient. In 40 years, the ratio may well fall to two workers per recipient. Under those conditions, either workers will pay enormously high taxes or benefits for the elderly will have to decline enormously. The arithmetic of the situation offers no third choice.

I begrudge nothing to today's retirement class, but it is a hard fact that my generation is unlikely to have it so good. Instead, we will have to support the older generation while finding a way to save for our own retirement.

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