The Lie Our Parents Didn’t Know They Were Selling

The LIE that, as of now, two generations (GenX and Millennials) bought into was that the path to success was to 1) attend a traditional four-year university, with a degree in Business, Engineering, etc. 2) get a job with a “good” company and work hard for the next 30 years 3) retire with a full pension and Social Security and enjoy your prosperous Golden Years.

There are maybe a few problems with that…not the first of which is there was not a lot of talk about any other options.

How did we get here? That is one question that kept coming back to me as I looked at my career transition from corporate employee to small business owner. My parents, and those around me as I grew up all had the same basic mindset but where did it come from?

I spoke with my parents to gain some understanding of where their mindset came from. From their viewpoint and solidly in the Baby Boomer era, they grew up post-World War II where the US economy was growing steadily1 and they saw and heard it was a good time to be an employee. Makes solid sense from where they stood to give that advice. But they also went through the late-60’s and through the, shall we say “bleep” show of the 70’s economics and the recovery of the “Reagan era”, still their advice to my sister and I, get a degree, get a job and be successful. Again, one path.

To understand the continued mindset, I started looking at the history of pensions in the U.S. during the 20th century. I got some interesting information.

According to “A Timeline of the Evolution of Retirement in the United States” published in 2010 by the Georgetown University Law Center

• As of 1899, 13 private pension plans existed and in 1900 Life expectancy for those who managed to reach the age of 60 would live approx. 12 more years to the age of 72.
• By 1919, those private pensions had grown to over 300 and covered approx. 15% of the US’s wage and salary employees.
• In 1935, Social Security was enacted and the retirement age of 65 was entrenched with life expectancy roughly still at 72 years of age.
• In 1940 about 15% of workers (4.1 million employees) in the private sector were covered by a pension plan.
• A decade later in 1950 the number of private sector employees covered by pensions was up to 25% (9.8 million employees)
• A number of congressional legislation packages between 1943 and 1960 impacting wages made pension plans more attractive for employers to offer.
• In 1960, coverage for workers under a pension plan increased to 41% for 18.7 million employees in the private sector.
  1 Growth Rate of GDP per Worker in the U.S., 1955-2014 (chart) based on Bureau of Economic Analysis and Bureau of Labor Statistics, via Fred
• In the 2 decades between 1960 and 1980, even with multiple legislative actions, pension cover rose to its peak of 46%, along with the establishment of the 401(k) plans in 1978 (defined contribution plans).
• By 1990, 401(k) plans are covering more employees and pension plans are covering less at 43% of private sector, or 39.5 million, employees covered by pension plans and 12.5%/11.5 million employees covered by 401(k). 56% of workers are covered by some form of retirement employer-sponsored plan outside of Social Security.
• Fast-forward to 2006, life expectancy after reaching 65 is 81 and 84 for men and women respectively. Pension coverage is back down to 20% and 401(k) is only 43%.

All of that to say, given the information that they were working with in the 80’s and 90’s makes perfect sense, earn a good living while you are working for 25-40 years and then retire and collect your pension and Social Security and you might do better in retirement than while you were working. Who would turn that down?

Fast forward again to 2025, post-COVID the economy is more global than ever and the driver for employers is cost effective, profit margins, shareholder ROI and many other financial buzzwords that don’t gravitate toward employee retention for 30 years and pension plans incentives are largely gone. What is the best path forward now?

It may be time for a shift in how we look at income as we approach retirement and how we pass those views on to the next generation. The stereotype of a burnt-out corporate employee is a stereotype for a reason, and how do we escape the path we chose two decades ago but still continue to save for retirement and enjoy our life? One way forward is to being open to the options that are available. Given how many options are available, why is the job market still the default?

The job market that existed in the 80’s and 90’s for GenXers or Millennials in the 2000’s entering the workforce does not exist today, so how does anyone find the right fit?

Ready to begin your career ownership journey? Contact The Entrepreneur’s Source® today to schedule your first conversation with a Career Ownership Coach®. Your future self will thank you for taking this important step.

About Your Career Revolution

Our mission is to help individuals explore self-sufficiency as an alternative career.

We help them define their Income, Lifestyle, Wealth, and Equity goals and provide education on the best ways to achieve them. We don’t sell franchises – we help people achieve their dreams of self-sufficiency through business ownership. The approach is different, the experience is different. And it works.

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