No retirement in sight: 5 reasons people are working longer in Ohio

Credit: DaytonDailyNews

It's recommended you have a safety net of 3 to 6 months to cover expenses.

Credit: DaytonDailyNews

When do you plan to retire? Americans are working longer than ever before.

The concept of retirement is quickly evolving for Americans, who are no longer ending their work lives in their late 50s and early 60s. Now, workers are extending their careers for a multitude of reasons: financial hardship, social security and pension changes, household dynamics and a need for purpose.

» FINANCIAL ADVICE: 5 tips for boosting your retirement savings

By 2022, more than 27 percent of Ohio’s labor force will be age 55 or older, according to the Ohio Department of Aging. Rapidly changing demographics and Ohio’s economic realities require employers to challenge stereotypes about employing older workers, while aging employees work to adapt to technology and culture changes in the workforce.

Here’s why people are working longer:

1. We’re living longer

In the United States, the over-65 population is projected to nearly double, from 48 million people to 88 million by the year 2050, according to the National Institute on Aging. Global life expectancy is expanding at the same time, and is projected to increase by almost 8 years, from 68.6 years to 76.2 years by 2050. The ranks of the very old – those 80 or older – will triple during that time, to 447 million worldwide, said Luigi Ferrucci, of the National Institute on Aging.

2. Needed purpose

After 29 years at LexisNexis, 66-year-old Steve Hess doesn’t see his career ending any time soon.

Hess envisions himself working until at least 70, but it isn’t merely about the paycheck. He works from home four days a week, and he continues to feel fulfilled by his job and relationships with colleagues.

“I love the people at LexisNexis,” he said. “I have people in my life ask me, ‘Why are you still working?’ You know, I like what I’m doing.”

3. Financial constraint

Ben Feldmeyer, a Centerville-based private wealth advisor, said the most common reason people can’t retire is a failure to plan. Many of these workers face barriers like a lack of skills or education. And some, like 68-year-old Stella Lee, have no computer skills, a huge barrier for someone trying to find work.

Goodwill Easter Seals Miami Valley’s Senior Community Service Employment Program (SCSEP), serves about 100 people every year in the Dayton region. The program, funded by the U.S. Department of Labor, provides employment opportunities for seniors age 55 and older with a limited income.

4. Changing Social Security, pension plans

Common retirement plans offered by employers have also drastically changed in the past couple of decades. Kathleen Romig, a senior policy analyst at the Center on Budget and Policy Priorities, said the overall benefit of Social Security is relatively small, making it difficult for people to live solely on Social Security benefits.

And those benefits could get smaller in the future.

By 2034, under current projections, the Social Security system’s trust fund will be exhausted. Congress will have to find a solution, which could include reducing benefits now by pushing back the age people have to be to claim benefits, Romig said.

5. Flexibility in the workplace

Peter Berg of Michigan State University said management practices help companies retain productive employees. Berg said the U.S. can learn from different workplace strategies employed in other countries. In Germany, employees are able to tap more flexible work schedules than in the U.S. and are given income and savings incentives to gradually leave the workforce over several years.

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