New Deal

The New Deal marks a turning point in the book’s account of American retirement: during the Great Depression, retirement became a public concern, and the Social Security Act of 1935 established a federal system funded by workers’ contributions. The reform created a durable foundation for retirement security, but the later weakening of pensions and savings left many older Americans working well beyond the age when retirement had promised rest.

Retirement Before and During the New Deal

Retirement was not a timeless stage of life. For much of human history, people worked until death or physical incapacity. The Great Depression sharpened the case for a different arrangement: by 1934, more than half of older Americans lacked the means to support themselves, while widespread unemployment made removing older workers from the labor pool seem increasingly necessary.

California physician Francis Townsend proposed a federal pension for workers who retired at sixty. His plan helped inspire thousands of grassroots Townsend Clubs. In 1935, President Franklin D. Roosevelt and a Democratic Congress passed the Social Security Act. Unlike the Townsend Plan, it required future retirees to contribute to a common fund throughout their working lives. The first Social Security check was issued five years later to Ida Mae Fuller, a sixty-five-year-old retired legal secretary in Vermont; it was for $22.54.

The Three-Legged Stool

After the New Deal, economists described the American retirement-finance model as a three-legged stool: Social Security, private pensions, and personal savings and investments. The image conveyed retirement security as a structure supported by multiple sources rather than by a single benefit. Social Security was the public leg, while employer pensions and household assets were expected to provide additional support.

The book emphasizes how much that structure later changed. Many households lost assets in the Great Recession, and saving had already declined for many people. From the 1980s onward, employers increasingly replaced defined-benefit pensions—which promised a monthly payment for life—with 401(k) plans based largely on employee contributions and investment performance. These plans could run out before the worker died, shifting more of the risk from employers and government onto individual families. The New Deal’s contributory public system endured, but the wider retirement arrangement around it became less dependable.

The Later-life Work Reversal

The erosion of retirement security appears in the book through the growing presence of older workers in temporary and physically demanding jobs. In 2016, nearly nine million Americans aged sixty-five and older remained employed, a 60 percent increase over a decade. Although most older Americans still regarded retirement as a time of leisure, only 17 percent expected to stop working altogether in their later years. The book describes this generational change as a reversal: younger baby boomers and those after them were increasingly less able to retire without lowering their living standards.

David Roderick illustrates how a pension could fail to provide lasting security. At seventy-seven, he was workamping and described retirees as dependable workers who could be relied on to show up and work hard. Earlier in life, after a divorce, he had cashed out a pension earned over sixteen years of teaching at California community colleges. With the state’s match, it might have grown to at least $500,000; instead, the $22,000 available at the time had to be divided between him and his first wife. The contrast between the pension’s possible future value and the sum he actually retained makes the loss of long-term security tangible.

Unequal Security and the New Deal’s Legacy

The New Deal framework did not eliminate unequal access to retirement income. The book notes that older women living alone faced particularly high risks of poverty: in 2015, more than one in six lived below the poverty line, and nearly twice as many elderly women as men were poor. Women’s Social Security benefits averaged $341 less per month, reflecting lower lifetime payroll contributions amid lower earnings and more unpaid caregiving. Longer average life expectancy meant those smaller resources also had to last longer.

Linda May’s experience brings that strain into the present. She began collecting Social Security at sixty-two, earlier than she later thought she should have, because the benefit seemed too small for waiting to make much difference. She still worried about how to live without working for the rest of her life or becoming a burden to her children. The New Deal made retirement a recognizable social promise; the book’s older workers show how that promise can be compromised when public benefits are modest and the pension and savings legs have weakened.