What Was Retirement Like In The 1970s And How Does It Compare To Today?

Retirement is a growing worry for Americans. Greenwald Research found in 2024 that over three-quarters of Americans agreed that the country faced a retirement crisis, and over half felt that they wouldn't be financially secure when they retired. When it comes to putting money away for the autumn years, there are also plenty of worrying statistics. For those so concerned, there's no shortage of guides out there for how to prepare for retirement.

It is, in some ways, a bleaker picture than existed for retirees just a few decades ago. The 1970s saw many of the World War II generation reach retirement age, just in time to enjoy the benefits of the Great Society programs and legislation. The poverty rate for senior citizens (a term that first came into common usage in the '70s) dropped that decade to 15%, from 35% in 1959 (per Contexts). It was also easier for many to retire early — and comfortably.

The '70s saw significant changes made to insure retirement security for seniors. The passage of the Employee Retirement Income Security Act of 1974 (ERISA) improved accountability and access to pension plans, which helped to set an optimistic and widely disseminated image of retirement. But stepping down from work in that decade wasn't all roses, and some the roots of the modern retirement picture stem from the 1970s.

A 1989 Social Security Bulletin found that the effective retirement age for men dropped to 62 over the 1970s, and that there were double-digit declines in the percentage of men over 60 still in the labor force. The bulletin also found that married men suffered little to no financial hardship for retiring early. But in that same decade, 45% of workers in the private sector were covered by pensions. And pension plans by their structure discouraged people from staying in the workforce for too long.

For example, the City of Los Angeles offers a pension to its workers. But, per Urban Wire, workers are subject to a penalty of a month's worth of benefits for every month worked over the retirement age. Workers — or a generation of workers — who relied on pensions would thus have a heavy incentive to retire early.

Many pension plans were, however, quite generous. Just five years at a company could in some cases be enough to entitle a worker to a pension. Monthly payments were often enough for a retiree to live comfortably. But anyone covered by such a plan who wanted to keep working past retirement would have had to take a substantial sacrifice when they did stop. And one could still miss out on any benefits at all if they left the company too soon; their forfeitures would be passed on to those who stayed with the company until retirement.

Many of the early retirees of the 1970s could often afford to do so, and in comfort. Their pension plans might have even provided additional incentives to step down early. But many older workers didn't have a choice in the matter. Mandatory retirement was much more common in the '70s than it is now. About half of employees in the U.S. were then subject to such a policy by their workplace. It helped cement the '70s as the high point of early retirement, capping a century-long trend.

Increasing lifespans, the rise of pensions, and economic concerns all helped to drive early retirement and justify mandatory retirement age policies. If workers had no choice but to leave a company at a certain age, that provided employers with a certain degree of order in taking people off the payroll. But there was also increased pressure from the baby boomer generation – as more of them came of age and entered into the workforce, there was more generational competition for jobs.

Some older workers had no objections to mandatory retirement, but others felt unfairly forced to give up working when they still had passion and stamina to carry on. They got relief before the end of the decade. In 1978, the Age Discrimination in Employment Act (ADEA) was amended to prevent anti-age discrimination for workers up to 70 years old, and the following decade saw mandatory retirements largely outlawed. There's been a reversal in such trends. these days, you're more likely to be warned against early retirement.

Although nearly half of workers were covered under a pension during the 1970s, that decade saw the passage of the Revenue Act of 1978. It paved the way for 401(k) plans and a retirement savings landscape that shifted responsibility and risk from employers to employees. There's a widespread perception, coupled with anecdotal accounts, that this was a net loss for workers and retirees; they didn't shoulder so much of the burden of retirement in those days and enjoyed generous benefits.

But the 1970s are known for a few things more than the prevalence of pension plans. The decade is also defined by disco, Watergate, tacky fashion — and inflation. A combination of factors, from international affairs to consumer expectations, helped drive up inflation and keep it high over many years, eventually requiring harsh measures by the Federal Reserve that left millions struggling until the economy settled on the other side of 1979.

The Monthly Labor Review conducted a retrospective study on the '70s to find what, if any, impact inflation might have had on the value of benefits provided to retirees by pensions. It found that, after 1973, most retirees covered under pensions received at least one substantial increase in benefits over the decade. But when inflation was factored in, the real value of these benefits fell over that time. The rate of inflation was just too high to be offset.

Call it a nursing home, call it a retirement community, call it assisted living — call it whatever you like, but the concept's been around a while. Senior Living.org traces the origins of assisted living as far back as the 18th century, though it didn't become an institution as we recognize it until the early 20th century. Largely charitable in nature, this early elder care in the United States was sometimes questionable; a series of fires in the 1950s was the beginning of a long period in which unsafe nursing homes took a deadly toll on their residents. But a series of laws passed the following decade, and a general response to the state of elder care, helped to kickstart the development of assisted living communities geared towards helping senior maintain independence and quality of life.

This trend continued into the 1970s. It was still new enough in that decade for publications like Life magazine to put quotation marks around the term "retirement community," but it attracted considerable attention. The stereotypical image of a retirement home you've likely seen in film and television — warm southern climate, light-colored buildings, waves of seniors engaged in organized activities (golf prominent among them) — took shape in the photos and promotional films made in the '70s.