The New York Times

March 6, 2005

 

The Late, Great 'Golden Years'

By Steve Lohr

SPEAKING at a 1961 White House conference on aging, President John F. Kennedy declared that adding years to people's lives through the magic of science and medicine, however impressive, was an insufficient ambition for American society. ''Our objective,'' he said, ''must be to add new life to those years.''

An answer to President Kennedy's challenge had appeared a year earlier outside Phoenix, where the developer Del Webb built his first big retirement community. Its name was Sun City, and its marketing come-on was that the ersatz town in the desert, with its own golf course, recreation hall and shopping center, was the ideal place to retire and spend life's ''golden years.''

On the eve of Sun City's opening, there were some uneasy moments. Two million dollars -- good money at the time -- had been sunk into the project. Experts had told the Del Webb team that older people might reject leaving family and friends for some unknown future among strangers in the desert. Would Sun City be a prefab ghost town?

It turned out to be a huge and widely imitated success, because it tapped into a new vision of American lives, one where anyone can leave work behind in late middle age to enjoy a lengthy period of active leisure before the infirmities of old age finally set in.

Though there was always a bit of Madison Avenue mythologizing to that vision, the ''golden years'' have been real and attainable for two generations of Americans, those born roughly from 1900 to 1945. Yet for people now in their 50's and younger, what once seemed to be a permanent new feature of the American dream appears to be rapidly receding.

Were the golden years ever a sustainable concept for American retirement -- and will we miss them when they are gone?

The rethinking of retirement is driven by both necessity and changing attitudes. The current debate over Social Security -- and the even greater strain on Medicare someday -- point to the problem of how to pay for the retirement expenses and old-age entitlements of the more than 75 million baby boomers, born from 1946 to 1964, as they move into their retirement years. Those problems reflect the flip sides of the forces that helped make the golden years possible to begin with.

The creation of Social Security in 1935 and the Great Society programs of the 1960's -- Medicare for health coverage and the Older Americans Act for community services -- provided older Americans with a base of financial security. Public and private employers added to that with pension plans that guaranteed fixed payments year after year. Now, private pensions are becoming rare, and the cost of public entitlements is rising sharply.

Yet the baby boomers are also shunning the golden-years notion of retirement as an endless vacation. Surveys by AARP and other organizations are finding that up to 80 percent of boomers plan to do some sort of paid work into their 70's. They see continued participation in the work force as a way to help them stay mentally sharp and socially engaged, as well as financially more secure.

''The 'golden years' was a brilliant marketing strategy, and a model of retirement that appealed to a lot of people for a long time, but it no longer works economically or socially,'' observed Marc Freedman, president of Civic Ventures, a nonprofit group that tries to make it easier for older Americans to work in their communities.

Today's retirees are a diverse group, 40 million people of varying ages, incomes and levels of activity. But there are signs that many of them, too, find conventional retirement unsatisfying.

''A life of leisure for most people is boring,'' said Ken Dychtwald, a marketing and strategy consultant on aging, who advises corporations and governments. One symptom that Mr. Dychtwald cited: Retired Americans watch an average of 43 hours of television a week -- akin to a full-time job. ''Traditional retirement has proved to be a failed experiment,'' he said.

Perhaps, but it is well to remember that the golden-years ideal was profoundly progressive in its day, reflecting a new affluence for the middle class, a triumph of social policy, and a sharp break with most of human history.

Before the 20th century, the vast majority of people -- all but the wealthy elite -- labored until they died, or just before. Work, it was said, was the pension of the poor. But as both prosperity and life expectancy began to rise sharply after World War II, a comfortable retirement became a possibility for many more people.

Social Security provided the incentive of a public pension. President Franklin D. Roosevelt hailed the program for protecting Americans ''against a poverty-ridden old age.'' Yet with 25 percent unemployment and young men riding the rails seen as a potential tinderbox of social unrest, there were other considerations as well.

''Part of the motivation was that it was seen as a good idea to get older people out of the work force during the Depression,'' noted Dora L. Costa, an economic historian at the Massachusetts Institute of Technology.

But it was the post-World War II ascent of the American economy that truly laid the groundwork for mass retirement. Executives and union leaders recognized the longer lives and greater affluence of many workers, but what was still missing, they said, was an alluring model of life after work. Walter Reuther described a retirement wasteland as ''too old to work, too young to die.''

Then came Sun City and the lustrous image of the golden years. Brochures from the time show happy retirees golfing, lawn bowling, landscape painting and bird watching in a sunlit Western terrain with palm trees, Saguaro cactuses, and modest but pleasant one-story houses.

It was a community, the brochure said, that promised ''An Active, New Way-of-Life'' designed for people ''55 and better.'' The marketing pitch spoke of play and community, using terms like ''the new leisure set'' and ''the friendly years'' as well as the golden years. This was not a future in a rocking chair.

The golden-years retirees were very good for the economy: a mobile, car-driving culture housed in freshly built exurban communities. Their spending gave a lift to Detroit and the construction industry alike.

Generational demographics assured them a large measure of financial stability. Following them were a huge generation of relatively well-educated people with good jobs -- the baby boomers -- whose work and taxes have amply financed the retirement entitlements of their parents.

The boomers, of course, confront a very different generational arithmetic: they are numerous, but had comparatively small families. Add in the steady stretching of life expectancy and a continuous stream of life-enhancing but costly medical advances, and the current path looks alarming.

''The problem is much more serious than most people realize,'' said Lawrence J. Kotlikoff, a professor of economics at Boston University, who is the coauthor with Scott Burns of ''The Coming Generational Storm'' (M.I.T. Press, 2004).

In recent years, companies have pulled sharply away from providing their workers with traditional fixed-benefit pensions; instead they offer plans that depend on workers' own savings, like 401(k) accounts, and give no guarantees.

But economists say that most workers are saving far too little in these accounts. Then, consider that half of all workers now retire at 62, when they first become eligible for Social Security payments.

''People are not going to be able to retire at 62 and sustain themselves in their current lifestyle,'' said Alicia Munnell, director of the Center for Retirement Research at Boston College.

Even the ''inheritance dividend'' that the boomer generation will eventually receive from their parents, estimated at as much as $10 trillion, will not greatly affect the overall picture for most people, because the richest sliver of the population will get the bulk of that money.

Yet the pessimistic prognosis assumes that current trends continue. There is an alternative: Change the nature of retirement, just as the golden years were a departure from what came before.

For example, raise the retirement age by three years, and the annual gain for the Social Security system -- from reduced benefit costs and increased taxes paid by workers still on the job -- would be about 30 percent of the program's total cost, according to Jonathan Gruber, an economist at M.I.T. That one change would erase all the worries about the looming deficits facing Social Security over the next 75 years, Mr. Gruber said.

A more subtle path would be a voluntary evolution of attitudes about work late in life among both employers and workers. There is some evidence that is already beginning. Nearly half of all people who formally retire from careers either continue to work in full- or part-time jobs or start their own companies, according to Joseph Quinn, a professor of economics at Boston College.

The golden-years dream was the freedom from work. ''The new dream,'' said Mr. Freedman of Civic Ventures, ''may be the freedom to work in new fields, and in jobs that are still rewarding.''