Retirement Changes Dramatically Over the Years

What Was Retirement Like in the 1900s?

In 1910, life expectancy at birth was only 50 years. Life expectancies were short because so many people died as infants and in childhood, and due to infectious disease. U.S. Census data from 1900 shows only about 4 percent of the population was 65 or older.1

People worked until they physically no longer could, so retirement wasn’t really a concept. Improvements in health care, sanitation and living conditions gradually led to a longer life expectancy. Below is a look at changing life expectancy and retirement age over the years, starting in the 1900s.

What Was Retirement Like in the 1930s?

The Great Depression, from 1929 to 1941, caused a major economic downturn. It showed the need for a national system to help older adults, and the Social Security Act was a key part of President Franklin Roosevelt’s New Deal efforts.

By 1935, life expectancy reached 60 for Americans.2 With the establishment of Social Security in 1935 and its setting of the retirement age at 65, retirement as a separate stage of life became a more accepted concept.

What Was Retirement Like in the 1940s?

The number of employees covered by private pension plans increased during the 1940s. The pensions — hundreds of them — offered another avenue for financial security in retirement. But the Wage and Salary Act of 1942, designed to control wartime inflation, froze wages at first. Luckily, it did not affect fringe benefits such as pensions.

The GI Bill, established after World War II, gave returning veterans many benefits to ease their readjustment to civilian life. They included educational assistance, home loan guarantees, job-finding assistance and unemployment allowances. The GI Bill greatly contributed to the economic boom of the 1950s.

What Was Retirement Like in the 1970s?

After the 1950s and 1960s, retirement was associated with more free time and fun, leisure activities. Taking retirement was often mandatory for workers during the 1970s, with about 50 percent of U.S. workers covered by mandatory retirement policies.3 Some older workers were ready and happy to retire, but others felt forced out.

In 1978, the Age Discrimination in Employment Act (ADEA) was amended. The goal was to prevent age discrimination and prohibit mandatory retirement before age 70.

There also was rampant inflation during the 1970s, which decreased purchasing power for retirees on fixed incomes. In the late 1970s and 1980s another major shift occurred that still affects us today: Companies moved from offering pension plans to 401(k)s. That transition effectively transferred the retirement risk from company employers to the employees themselves.

What Was Retirement Like in the 1990s?

Nursing homes became more common following the establishment of Medicare and Medicaid in 1965, which provided funding for long-term care. The assisted living industry emerged in the 1980s, and by 1998 there were over 11,000 assisted living facilities nationwide.4

Major legislation passed in the 1990s affected all seniors and their retirement years, but especially women. The Older Workers Benefit Protection Act (1990) safeguarded benefits thanks to the efforts of one woman. Unemployment Compensation Amendments (1992) enabled tax-free retirement rollovers, which was crucial for women who had varied career paths, often staying home with kids or working part-time.

The Family Medical Leave Act (1993) offered job-protected leave, which was vital for caregivers, who were predominantly women. And the Homemaker IRA (1996) allowed nonworking spouses (often women) equal opportunities to save for retirement. Those legislative acts greatly advanced women’s — and everyone’s — financial and retirement security.

What Was Retirement Like in the 2000s?

The retirement system in the United States during the 2000s faced major challenges after two economic recessions that greatly impacted many people’s financial stability.

By 2000, the average retirement age was 62 — the age at which people were eligible for Social Security.

In 2007, over half of U.S. households were approaching retirement age and they didn’t have enough savings to maintain their standard of living in retirement. The shift toward defined-contribution plans left many older adults unprepared for retirement. Many lacked the financial education and investment knowledge necessary to manage their accounts effectively.5

The Influx of Older Workers

Between 2010 and 2019, labor force participation among adults ages 65 or older increased from 17.4 percent to 20.2 percent. Financial concerns were a primary driver of the shift, according to data from the Bureau of Labor Statistics.

Over 19 percent of adults who are 65 or older are employed today, according to Pew Research.7 Some work to stay active, but many have jobs and businesses to make ends meet and pay for the rising cost of food, goods, insurance and even home care.

It’s not uncommon to see older adults getting minimum-wage jobs bagging groceries part-time or working at companies in a range of positions. At the same time, older adults are also seizing the reins and starting their own businesses. More than half of business owners in the U.S. are 55 or older.8

What Is Retirement Like Today?

Over 57.8 million seniors live in the United States today.9 Many of these Americans, who have already retired or are in the process of retiring, are baby boomers. They have access to technology, think nothing of traveling to see loved ones and are happily involved in myriad social activities.

Average life expectancy has gone way up since the 1900s. In 2025, it’s about 78 years.

What Are the Positives and Negatives of Retirement?

Many older adults are greatly enjoying retirement and their golden years. More good news: The poverty rate for Americans 65 or older has dropped substantially during the past 50 years. It was 30 percent in 1966, but it’s only 10 percent today. Older Americans are also better educated than previous generations.

On the negative side, from 1988 to 1994 and 2015 to 2018, senior health took a hit. American seniors with obesity nearly doubled, increasing from 22 percent to 40 percent. According to the National Council on Aging, a startling 95 percent of adults 60 or older have at least one chronic condition, and nearly 80 percent have two or more.10 The increasing costs of health care has also presented serious challenges for many older adults and their families.

Additionally, more older adults are divorced, and many older women live alone. Our country has an epidemic of loneliness and isolation, and the caregiver gap is causing more headaches for healthy seniors who want to age in place.11

Retirement has therefore undergone significant changes during the past 100 years. The changes have been shaped by life expectancy, changing policies, economic conditions and health-related care. Retirement, which was once considered a time of leisure, is now a time to take on more work in order not to outlive your money, a time to pursue your hobbies and interests, and a time to spend moments with cherished friends and family.

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