From Thomas Paine to Dell Webb: 250 Years of Retirement Angst

Active retirement? Cheerleaders in the Sun City, Arizona, senior living community in1997. (Evan Hurd / Alamy)

It’s the question that keeps millions of Americans up at night: Do I have enough saved for retirement?

It’s the question that keeps millions of Americans up at night: Do I have enough saved for retirement?

Unfortunately, few can answer with a confident yes. Almost half the nation’s families have no retirement plan, reports the Federal Reserve. And those hoping to rely on Social Security face a 22% drop in paid benefits if Congress lets a key trust fund run out in 2032, according to the Bipartisan Policy Center.

“Old age is at once the most certain, and for many people, the most tragic of all hazards,” Franklin D. Roosevelt said in 1934, still speaking for millions of Americans today suffering sleepless nights.

Retirement angst goes way back, starting with Thomas Paine—yes, that Thomas Paine — who came up with what he thought was a solution.

The Founding Father, and author of the revolutionary pamphlet Common Sense 250 years ago*,* applied his concept of human rights to retirement in Agrarian Justice in 1795.

Paine proposed the government pay “10 pounds per annum” to citizens 50 and older, as well as to those physically unable to work. “It will immediately relieve and take out of view three classes of wretchedness – the blind, the lame, and the aged poor,” he wrote.

It amounted to about half a laborer’s annual wages. It was to be supported through an inheritance tax. The proposal went nowhere.

And here we are.

Since then, the modern concept of retirement—enjoying one’s “golden years” in leisure as a reward for a lifetime of labor—evolved in fits and starts. Figures like Otto von Bismarck, Huey Long, and the developer Del Webb all played roles.

Yet the reality of retirement in America has never quite matched the concept of spending one’s golden years free from worry and toil.

Before the industrial era, most everyone lived and died on the farm. They worked as long as possible—Paine correctly estimated life expectancy of around 50—then depended on family for care.

Industrialization changed things. Workers clustered in cities, away from farms and families. They had little to fall back on when they aged out of work. By the 1870s, a national crisis was brewing and companies came up with various plans.

American Express, for instance, established the first corporate pension plan in 1875, covering only disability. (Delivering packages was a dangerous business back then.)

The Baltimore & Ohio Railroad introduced the first defined-benefit pension plan in 1885, part of an industry-wide reform program motivated by the Great Railroad Strike of 1877.

Other industries weren’t as quick to follow.

In 1906, of a nationwide workforce of around 24 million, only 800,000 to 900,000 were covered by pensions, The Wall Street Journal reported. Half a million of those were railroad workers, and another 60,000 or so from Standard Oil.

“Among the industrial corporations outside of Standard Oil,” the Journal wrote, “the pension plan has not yet been widely worked out.”

It wouldn’t be worked out for years.

At the same time the B&O was dealing with labor problems, Bismarck—first chancellor of a united Germany—was having trouble with Marxists.

To blunt their appeal to Germany’s industrial workforce, Bismarck proposed a social program including the first national old-age insurance program. (You can thank it for establishing 65 as the retirement age.)

Bismarck held off the Marxists. But his program, called state socialism, proved problematic in the 20th century.

In the U.S., states took the lead, though fewer than 10 offered old-age insurance by 1929, when the market crashed.

The Great Depression that followed swept out Herbert Hoover, swept in Franklin D. Roosevelt—and made a folk hero of Huey Long.

The U.S. senator from Louisiana, the self-styled “Kingfish,” in 1933 proposed a “Share Our Wealth” program featuring a guaranteed minimum income. To sell it, Long brought new meaning to the term “political stunt.”

“Baton Rouge went wild tonight,” the Beaumont, Texas, Enterprise wrote Oct. 24, 1934, “[as Long] handed out thousands of dollars in ‘cold cash’ to wildly clamorous crowds.”

Concerned that Long would contest the 1936 Democratic nomination, FDR adopted planks from his platform, including old-age insurance. It helped get him re-elected. Long was assassinated shortly after passage of the Social Security Act of 1935.

Starting with a $22.54 check to Ida May Fuller on Jan. 31, 1940, Social Security has since become the government’s most popular program—and the “third rail” of politics (touch it, or even propose messing with it, and get burned).

It also cemented the idea of a comfortable retirement as a right earned by decades of toil. And a whole industry has grown up to serve this new consumer segment, “senior citizens.”

Safeway, for instance, offered senior discounts in 1947. Dr. J.A. Campbell advertised dental services at “special low prices” to seniors in the Jan. 1, 1950, Fresno, Calif., Bee newspaper.

The Interstate Theater chain, meanwhile, introduced 50% discounts to seniors and another growing group of spenders, teenagers, in March 1958, when “The Bridge on the River Kwai” was tops at the box office.

But that wasn’t all. The Nov. 27, 1955, Chicago Tribune’s classifieds are full of pitches for Florida “retirement” homes, from $4,950 on the “famed” East Coast.

And, in March 1966, the Cape Cod, Mass., Chamber of Commerce had a pretty good idea.

“An easy natural way to prepare for retirement is to buy a ‘second home’ on the Cape,” read a chamber ad in Barron’s. (Wonder what that kind of place would be worth today? Answer: a lot.)

The biggest bet was made in 1959 by Del Webb, who paid $20 million for 20,000 acres near Phoenix, built a retirement community around a recreation center and golf course, and watched seniors stream in.

Sun City soon became synonymous with an active retirement (and remains that way today).

“My old man used to say it was only the railroad companies that did anything for the guys it retired,” Webb told Time magazine in 1962. “Well, it’s pretty grim, being old with nothing to do.”

To be sure, defined-benefit pension plans became a hallmark of blue-chip corporations beginning in the 1950s. But they never covered more than a third of non-agricultural workers. The 401(k) defined-contribution plans that have replaced pensions also leave many workers uncovered.

Today, there’s no lack of things for seniors to do, from adults-only yoga classes to blues music-themed cruises. There are retirement communities in every state for every interest.

Still, the insomnia-causing question remains: can you save enough to retire in a place like a Del Webb community?

Paine would have an answer.

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