For most of American history, stopping work and starting the retirement period at a certain age did not exist as a social institution. Into the late 1800s, over 75% of men 65 and older still worked. Those who couldn’t work went to poorhouses or lived with family.
The 1913 Webster’s dictionary defined “retire” only as stepping back or withdrawing—no professional meaning. A structured exit tied to age was not part of American life.
No Such Thing as Retirement Before: Now It’s Normal
That changed in the 1930s. The financial collapse pushed the federal government into a new role. The Social Security Act of 1935 created the first federally run old-age pension system, funded by payroll taxes. It set age 65 as the threshold for monthly benefits.
That number would shape retirement policy for 90 years. And yet, those who chose it called the figure “admittedly arbitrary and empirical.” Pension arrangements were scattered.
When It All Started for American Retirees
The first public pension fund (1857) covered injured NYC police officers; retirement benefits for officers began in 1878 at age 55. American Express launched the first private pension in 1875 at age 60.
Federal old-age benefits existed mainly for Civil War veterans after 1906. By late 1934, 28 states had old-age pension laws, with retirement ages at 65 or 70. Germany had a national pension since 1889.
The Committee That Chose 65 as Retirement Age in America
The constitutional question of federal authority remained unresolved, so most action was at the state level. The Great Depression forced the issue. The 1929 stock crash exposed older workers’ financial insecurity. “There was really no concept of retirement as we think of it today,” said Tyler Bond. “Some well-to-do Americans might have had personal savings.”
In June 1934, Roosevelt assigned the Committee on Economic Security, led by Labor Secretary Frances Perkins, to draft the Social Security Act. The committee reviewed state pensions, the Railroad Retirement System, demographics, and actuarial data. They settled on 65 years old.
Robert J. Myers, an actuary on the committee, wrote: “Age 65 was picked because 60 was too young and age 70 was too old. So we split the difference.” The reason was fiscal, not biological: 65 was the actuarial threshold most likely to make the system self-sustaining without steep tax hikes, given life expectancy data.
Retirement Adjustments Over Eight Decades
The Supreme Court upheld the Social Security Act in 1937. Congress moved the first payment date to January 1940. Coverage later expanded to dependents, farmers, the self-employed, and people with disabilities. An early retirement option at 62 (reduced benefits) and a delayed credit up to age 70 were added.
When Social Security funded Medicare and Medicaid in 1965, retirement had become a normal part of American life. The 1983 Webster’s defined “retired” as “withdrawn from one’s occupation.” That same year, an amendment gradually raised the full retirement age from 65 to 67 over decades.
Present Retirement System
Retirement became more layered with IRAs and 401(k)s. By 1985, only 10.8% of adults 65+ worked—a share that has since climbed as more people work into their 70s and beyond. As of October 2025, nearly 56 million older adults receive Social Security, typically alongside pensions, savings, and investments.
The threshold of 65—chosen in 1934 because it split the difference—now anchors a system paying benefits to tens of millions each month. The current full retirement age of 67 is the only legislative adjustment to that baseline in over 80 years.
