When do you plan to retire? What do you plan to do when you retire? How will you pay for it?

That last question has been vexing people for a long time.

During the Roman Era, the Empire was forever in a quest to conquer some land or kingdom somewhere. From Rome, it reached out to Africa, Europe, Great Britain, much of the Middle East and parts of what is now Russia. Conquering all of those Barbarians and Mongols was hard work, and to quell an uprising of Centurions and Gladiators, somewhere around 12 A.D. Augustus Caesar established one of the first pensions for warriors returning from battle.

His armies were so massive, though, that some historians say that this pension helped spur the fall of the Roman Empire.

One of the first taxes to fund retirement was created in 1889 by Otto von Bismarck in Germany. His “Old Age and Disability Insurance Bill” created a tax on workers to fund an annuity for those who had reached age 70.

At the time, the average life expectancy of a German was around 45…

Here in America, our first promises of a “pension” came for veterans of the Revolutionary War. They were modified again after the Civil War, and again during the ‘Progressive Era’ of the late 1800’s. The Civil Service Retirement System was created in 1920, and Social Security was signed by Franklin Roosevelt in 1935 as part of his New Deal.

As we’ve progressed as a society, however, the taste for public funding of retirement or disability has faded. So, too, has the traditional company-funded pension. More and more, the responsibility for providing for retirement has fallen on the individual.

In the 1970’s, a group from Kodak lobbied Congress to allow them to invest part of their pay in the stock market, and to make that tax-exempt. In 1978, Congress changed the IRS code to allow for a “401(k)” exemption as a simple way to save for retirement – tax-exempt – and remove some of the financial burden from the taxpayer.

This proved to be enormously popular, and many employers told their employees, “Hey! Great! If you do this, we’ll kick in too!” Some businesses matched employees dollar-for-dollar, some matched up to a threshold, and some would match a set percentage of whatever the employee kicked in.

Most employers also eliminated or reduced their company-sponsored pensions, but here we are.

We’re still contributing and investing in 401(k) plans today. And more than ever. But our population isn’t dying at 45, and it isn’t quitting work at 65, and many are working into their late 60’s, 70’, or later.

We remember reading an article a few years ago in the Los Angeles Times about a woman approaching 80. She was still working because over her 80 or so years she had amassed a lot of debt. She had so much debt that she was living out of her van.

We run into this a lot. We’re not retirement specialists, but have a lot of experience working with people in debt. And many of our clients are retired or nearing retirement and are stuck in a quandary because their income (through either work or Social Security) isn’t enough to pay off their debt.

We get a daily newsletter from the American Bankruptcy Institute, and they sent a doozy this morning. It linked to a Wall Street Journal article that pointed out that Americans between 35 and 64 didn’t have enough money to live out their retirements. They faced a shortfall of over $3.8 trillion dollars, with over 40% of households projected to run out of funds.

Contrary to the perception that we elect people to go to Washington and disagree with each other, Congress recently passed some important legislation on that front, and it’s expected to be signed into law. It would move today’s 401(k) a bit closer to old-fashioned company pensions, and provide a better guarantee that retirees would have a consistent income until the end of their lives. It also would make it easier for small companies and private businesses to play in this massive pond and offer good, solid, attractive 401(k) plans for their smaller teams. It takes a bit of working capital for a business to start up a 401(k) for workers, and this would make it easier for the smaller players to join together with their peers to share the administrative costs.

We’re still an aging society with dwindling financial resources, but having a plan is better than no plan at all.