Vital retirement lessons from the 1950s

If aging baby boomers were suddenly transported back to the 1950s and had to retire in that era, chances are very good chance they'd feel deprived. The numbers show that retirees in the '50s had substantially fewer financial resources compared to today's retirees. Yet the stories about retirees from that time show they lived their lives to the best of their abilities without feeling shortchanged.

What can we learn? Let's take a look.

I spoke about this a few weeks ago with my uncle John Vernon. He was an attorney and banker throughout the last half of the 20th century in Marion, Iowa, a small town outside Cedar Rapids in eastern Iowa. He worked with both individuals and small businesses, which gave him insights into how regular Americans lived in retirement during that era. And, in particular, he was a first-hand witness to my grandparents' retirement.

People who retired in the '50s were working adults during the Great Depression, so they weren't strangers to hard times. As a result, almost everybody worked as long as they were able. Many people were farmers or shopkeepers, and they simply kept working, slowing down as they aged but continuing until they were just too feeble to work at all.

In their later years, they often hired help to keep the farm or business going, which was usually their primary asset. Farmers often aspired to pass the farm along to their children, whereas businesses were either passed to the next generation or sold to finance the owner's retirement.

Some people worked in local factories, and only a few had pensions. Factory workers were the only people my uncle knew who counted the days until they could retire. Most of the farmers and shopkeepers took pride in and were fulfilled by their work, and they valued their social interactions and role they played in their community. (This aligns with current thinking about how to make retirement work enjoyable.)

Here's just one example of the modest resources many retirees had to get by on: In 1950, the average Social Security benefit was $29 per month. In 2012 it was $1,262. In 2012 dollars, that $29 translates to about $280, which means the average Social Security benefit in 2012 is worth about 4.5 times the average benefit in 1950.

My grandfather's situation provides a good example of how people retired at that time. He worked for 30 years as the superintendent of schools for the local school district. He retired at age 64 with modest savings, a small Social Security benefit and a paid-for home. In his later working years, he started a cottage-industry educational-supply business that he continued running well into his retirement years. He earned needed income from that business until he couldn't continue any longer at age 75.

He passed away at 86, so his full-time retirement lasted just 11 years, longer than the average retirement in that time, which was eight years for men attaining age 65 in 1950, according to a report from the Stanford Center on Longevity.

Since money was scarce for retirees in the '50s, they were quite frugal, spending just on the basic necessities -- food, clothing and shelter. Many people grew fruit and vegetables in their gardens, canned produce for the winter and sewed their own clothes. Here's just one example of their frugality: As a child and teenager, my uncle was considered "affluent" because he could afford to have his hair cut for a quarter.

Many people didn't own a car, or they owned one at most -- two-car families didn't exist. There were few TVs, no computers, no cell phones, no entertainment centers, no home gym equipment. Long-distance phone calls were expensive, so people usually communicated with distant friends and relatives via regular mail.

Retirees pursued hobbies and were active in their church and community service clubs. Entertainment often consisted of listening to the radio, reading the newspaper, visiting and playing cards with neighbors and pot-luck dinners. Vacation travel usually meant driving to neighboring counties or states to visit relatives. There were no European vacations, no time-shares and Florida and Arizona as retirement destinations weren't an option for most folks.

By today's standards, medical care was very basic. For example, the overwhelming majority of people were born at home, not in a hospital. Polio was a serious threat. Doctors could help treat acute illnesses and the occasional appendicitis, but they didn't go to heroic efforts to treat serious, chronic conditions such as heart disease or cancer.

In spite of all of these "limitations," my uncle told me that people generally accepted the status quo and didn't feel deprived. They got satisfaction from being an important part of their family, friends and community. They didn't pine for a better life, and they felt they were "all in it together."

Today, advertising and the Internet constantly send messages that life could be so much better if we would just buy more stuff. We're shown constant comparisons to a "better" life, leading to the belief that somehow we're living inadequately.

Today's retirement "crisis" has been well documented, and I don't mean to diminish the challenges we face. The takeaway for me, however, is that we should be focusing on what we do have, not on what we don't. We shouldn't let advertising and this culture of acquisition we live in define us and our expectations. We should make the best possible life by banding together with family, friends and communities.

Instead of comparing ourselves to the Joneses, let's focus on what we really need, what we can realistically afford and what truly makes us happy. After all, the Joneses are most likely in the same boat, so what good is it to try keeping up with them?

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    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.

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