Thursday, March 17, 2005
Looking at Social Security and retirement age

By Dr. Anthony Policastro
Nanticoke Memorial Hospital

Here is an updated old article based upon the current Social Security debate:
A few years ago, I wrote an article about the history of retirement and Social Security. Now that discussions about the future of Social Security are on the forefront, it may be wise to review that history. We learn many lessons from history. Many things that we do have a long, historical background. Modern medicine has directly impacted the Social Security program. Prior to 1900, there was no such thing as a retirement age. Eighty-five percent of people worked until they died. It did not matter whether they were over 65 or not. The other 15-percent of the population did not work because of illness or disability. Retirement was an unusual thing. The first change to this concept occurred in about 1910. At that time, many Civil War veterans reached age 65 and were eligible to retire. As they did the number of people working beyond age 65 started decreasing. It was no longer 85 percent. Over the next 25 years, most of these veterans died. Therefore, the number of people working beyond age 65 increased again. That all changed in 1935. At that time the Social Security Act was passed. It made it possible for people over age 65 to retire. That was before the days of antibiotics. It was before modern medicine. People died of simple infections. They died of complications of surgery. The average life expectancy was 66. Thus the government would only have to pay Social Security for approximately one year per person. They got money from those under 65 who were still working. There were many workers. The program did not last long for the average individual. It was self-sustaining. Many people do not realize some of the politics behind Social Security. The country was still in the depression at the time. Unemployment was high. The highest rate of unemployment was among older workers. If a law was passed making them eligible to retire at age 65, they would no longer be unemployed. Thus, the law took everyone over 65 off the unemployment rolls. The unemployment rate dropped overnight. The government was not taking a big risk. Medical care was not at the point where life expectancy would increase.
For the first time in history, a new expectation was created. That expectation was that an individual would be able to stop working at age 65. With this expectation, the number of people over age 65 who were still working started to go down. It was no longer at the 85 percent level that it had been before 1900. In the meantime, medicine began to make great strides. Antibiotics cured infections. Surgical techniques advanced far enough to replace failed organs. Technology allowed earlier diagnosis of illnesses. That allowed earlier treatment. Life expectancy increased drastically. It is no longer 66 years. It is now closer to 80 years. The result has been to allow people to have many more years of retirement than was planned in the beginning. The program has increased payments with inflation over the years. It has not increased expected retirement age over the years. The one exception was a few years ago. At that time, there was a modest increase to 66 years for some people and to 67 years for younger individuals. The question facing the nation now is how to make adjustments to a program that is over 60 years old. That is tough to do. It is also a tribute to modern medicine that such a dilemma even exists. Retirement at age 65 is an oddity of 20th Century American History. The benefits of early retirement are obvious to anyone who has spent almost 50 years of their lives working. One might ask about the side effects of early retirement. There was actually a study done a few years ago to look at this. The study looked at the secrets to a long life. The number one factor was genetics. Those people with a history of long life in the family tended to live longer. Those with early heart disease died early. Those with a strong history of cancer died of cancer early. However, the second most important factor wound up being meaningful work. Whether that is work in the form of a paying job or volunteer work is not important. What is more important is feeling that you are making an impact. Happy marriage placed third. Thus, early retirement may have some side effects. We frequently forget the fact that things do not happen in a vacuum. There is always a history involved. The history of Social Security is closely tied to the wonders of medicine. Extending life expectancy has created a dilemma for us. Understanding the sources of that dilemma may make it easier to solve. One solution for future Social Security problems is to go back to its roots. It began with the expectation that people worked until they were too old to do so any more. That was consistent with past history. That would mean that, as the life span increased, so should the age of retirement. Our current generation grew up with the idea of retirement at age 65. It has become a tradition. Any attempt to change the retirement age would be extremely unpopular. Thanks to the success of medical care over the years, we are looking at a future crisis.

Dr. Anthony Policastro is medical director at Nanticoke Memorial Hospital