So You Think Your Pension Journey Was Tough?

I’m a bit of a history buff (nerd), and lately I’ve been reading “The Roman Army: A Social and Institutional History,” a very good read if you have any interest in ancient Rome. I came across an interesting fact I was unaware of.

We have a lot to thank the 19th-century German Chancellor Otto von Bismarck for. He created the first state pension in 1889. But you might be surprised to learn that nearly two thousand years earlier, an empire was providing its military forces with something very similar.

In 13 BC, the emperor Augustus established the *aerarium militare*, or military treasury, creating a fund for veteran pensions. The system offered Roman legionnaires retirement packages worth around thirteen times their annual salary, which could be claimed after twenty years of active service. I’ve known a few Scots in my day; fighting them for 20 years would surely make you deserving of a pension, and probably therapy.

Interestingly, some veterans could retire as early as age forty-two with full benefits. It would seem FIRE has a long history, though their version involved considerably more actual fire and pointy objects. And we probably wouldn’t want to debate the merits of FIRE with an angry legionnaire wielding a sharp and bloody sword.

The system seemed remarkably generous and comprehensive. Veterans received land grants, monetary payments, or equivalent value in livestock and equipment. Augustus funded this through dedicated revenue streams, including inheritance taxes. This pay-as-you-go system, where current taxes funded current retirees, closely matches how most nations fund pensions today.

Outside the military system, things weren’t so rosy if you happened to be a slave or commoner; here it was very much dependent on family members to provide support, although life expectancy wasn’t that long anyway. And if you had no family support, it could be even shorter, a stark and awful reality.

For the wealthy, Cicero, the famous orator and statesman, suggested acquiring income-producing assets like rental properties and agricultural estates that could provide passive income during old age. His personal correspondence revealed investments across multiple properties and commercial ventures. I see no surprise that the richest have a long history of looking after themselves, but I guess, knowing the alternative was potential spit-roasting by Germanic tribes, it was possibly a sensible thing to do.

You may have struggled over the years to fund your retirement accounts and worried over your asset allocation, but surely we have it better than those early soldiers. They had to keep savage hordes wearing animal skins and body paint—with no deodorant—at bay for twenty long years just to claim that pension. My relief at getting to the finish line was great, but the feeling for a legionnaire must have been out of this world. I imagine jumping up and down in excitement would have been acceptable, assuming, I might add, they still had both legs attached.

Passive income, pensions, and early retirement—it would seem times change, but the struggle for a safe retirement is much longer than I ever expected. Although I suspect most of us would prefer facing these challenges today rather than on the battlefields of ancient history.

Hail Augustus!