Retirement as a normal stage of life is barely over a century old
For most of history people simply worked until they died. Short lives, no social security and no pensions left little choice. Germany changed that in 1889 under Otto von Bismarck, becoming the first country to offer retirement benefits, and the idea spread through the late 19th and early 20th centuries.
Today most developed countries fund old-age pensions through employers or the state, and in many Western nations retirement income is treated as a constitutional right, though in many poorer countries family remains the only support. The shape of pensions keeps shifting. By March 2023 only about 15 percent of American private-sector workers had a traditional defined benefit plan paying a set income, as employers moved to 401(k)-style contribution accounts, while roughly 75 percent of public-sector workers still had pension coverage.
There is no fixed age to stop, but tax rules and state pensions make certain birthdays the norm, generally somewhere between 50 and 70. As lifespans lengthen, those thresholds are rising. France lifted its minimum from 60 to 62 and full entitlement from 65 to 67 in 2010, phasing the change in over eight years, and Spain and the United States are both moving their standard age from 65 to 67 by 2027. Some careers run on different clocks: American police officers can often leave on half pay after 20 years, and military members may retire after 20 years of active duty.
What drives the decision has been studied closely since 1992, when the U.S. Health and Retirement Study began surveying adults over 51 every two years; Europe and England followed with similar surveys in 2002 and 2004. One puzzle stands out: people cluster at the official early and normal ages, 62 and 65 in the U.S., even though benefits are set so that waiting one more year is roughly financially neutral. Wealth matters less than one might think; one analysis found receiving an inheritance made an unexpectedly early exit 4.4 percentage points more likely across eight years.
Couples tend to move together. American husbands are on average three years older than their wives, and each partner becomes more likely to stop working once the other has. Poorer health also goes with earlier exits. After the 2008 crash, some predicted people would work longer to rebuild savings, but one study estimated that layoffs would push more into retirement than lost savings would hold back.
Source: Retirement
