From the mid 30's to mid 50s, 10 Year rates were between 2 and 3%. The DOW remained flat with a value of 1921 in Jan 1935 and 2206 in Jan 1950. So for a long period of 15 to 20 years, people could not retire off either interest or dividends. What did they do? How did retirement/pension work in this environment?
They died much younger. “Retirement” back then lasted single digit years, for those even lucky enough to make it that far.
They didn't retire. Retirement is for elites. Plebs have to work themselves till death. Always has been. Our parents generation got lucky and took advantage.
Yeah the boomers are basically the first generation to experience such a glut of wealth they could afford to retire early, or at all. Pensions were a way out, but you had to serve 30+ years and often times (unless you were in a welfare position like the military, police, or government) your pension wasn't enough to cover expenses as inflation became intense. As @nooby_mcnoob said - you pretty much worked yourself to death regardless. Here is a link that is interesting. Especially in my industry (tech) I expect to be aged out in my late 30s. So I've got less than a decade to go before I'm a complete dinosaur and need to find something else to do. Other industries, for example labor, age out quicker. Even though most people don't plan on retiring the likelihood of you being forced into retirement in your late 60s (provided you live that long) is very high either due to industry pressure or physical decline. It gets doubly bad considering even good retirement savings habits (20%+ of gross) could still spell disaster if you catch a bad market run at the wrong time. Payroll taxes aren't high enough to support social security in America so you may as well not count on that either. I'd start acclimating to the taste of beans and rice every day now.
The reason retirement age was set at 65 was because life expectancy in 1940 was ~61. The pension authority didn't expect too many would receive a pension.
%% Didnt work very well; 1730s to 1830s average age was thirties.Try not to be a retired couch potato or get killed in an under performer like the DOW or in a world war also.War can be good for stocks .,
%% That, ironchef; or you have a well tested battle plan, or both. Made plenty of money in 1974,1975 not 1973.Vietnam War[US mostly lost Vietnam] =1965-1975. [ I was too young before 1974, school graduation LOL]..................................................................................Did make some money/cash as a kid cutting lawns.
A friend of mine was a defensive tackle in the NFL for years, tough as nails. He was once asked when he planned to retire. He answered "Retire?...Retire !!??, I'll retire when they put cotton in my ass."