Retirement Crisis: Many older area residents wonder if they can ever retire

A separate Bankrate survey found 41% of all adults say they don’t have enough money to fully retire.

Jackie Allison, 43, a lifelong Dayton resident, said the jobs she took prior to her current one did not offer retirement savings options.

“I really had no knowledge of what was out there for me,” she said. “I needed to be able to make ends meet, so I had no money to save, really, and no option to put that savings towards the retirement.”

She said she started planning for retirement about six years ago, but remains uncertain about her retirement goals.

“I have not really looked at the amount of money that I need to retire comfortably,” she said. “I don’t know that I will ever be able to make that at 43. I just started saving and I currently work for an employer that does offer retirement and matches, so I am investing into retirement — 10% — but that’s all I can afford to invest currently. That’s all I can do, and I’m not looking at where that puts me, because that’s just an additional anxiety.”

Even with Allison organizing her retirement efforts years ago, she said she still feels “very behind” and is unsure of if and when she’ll be able to retire, especially with the uncertainty of Social Security and the current health care system.

She emphasized the importance of planning ahead.

“Definitely search for an employer that’s going to invest in your future and put as much into a retirement fund as possible and invest in some kind of minimal item,” Allison said. “For me, I don’t do high-risk anything, but I have an MMA (money market account) as well that I am investing in some savings, which (produces) very small yield.”

Public policy debate

State Rep. Sara Carruthers, R-Hamilton, this year called attention to the retirement crisis by proposing a bill that would required the state of Ohio to explore a state-assisted retirement program for small businesses and employees.

“By addressing the retirement savings gap, we can empower small businesses to continue growing, thriving, and providing good jobs to our communities,” Carruthers said during her testimony for the bill in November.

Credit: Nick Graham

Credit: Nick Graham

The bill, House Bill 501, was never voted out of committee before the end of the legislative session this month.

Kalitha Williams, outreach and advocacy manager for AARP Ohio, said the state is heading into a retirement savings crisis.

“Nearly 2 million Ohio workers, or 42% of the private workforce, do not have access to a retirement savings plan at work, leaving them unprepared for the future,” Williams testified in support of H.B. 501. “Without retirement savings accounts, Ohioans will count on Social Security even more for financial security. However, Social Security alone is not enough to afford the increasing costs of necessities such as gas, healthcare, food and housing.”

Research shows that people are 15 times more likely to save for retirement when they can do so through their regular paycheck at work, she said.

“Much like a college savings plan, the worker owns their account and can take it from job to job, while saving as much or as little as they want through paycheck deductions,” she said.

Desiree Hung, a retirement savings project officer at the non-partisan, nonprofit organization the Pew Charitable Trusts, said a shortfall in retirement income means that some Ohio households will need help in the form of Medicaid and other assistance programs.

Proposed solutions include:

Widow: ‘I wasn’t prepared’

According to the latest data from the U.S. Census Bureau in 2020, Ohio had a population of approximately 11.7 million people, with over 16% of the population being over the age of 65, making it one of the top states with a large retirement age population.

But many people are like Allison and have doubts about reaching their savings targets, according to a Bankrate survey that says 48% of workers who have set specific retirement targets express skepticism about their ability to save enough to reach their desired savings amount.

Approximately a quarter of Americans aged 50 and over anticipate never retiring, according to AARP.

Chris Bonner, 67, of Springfield, said retirement planning became a less feasible option than ever starting in 2000, when her husband was injured in a crash. In and out of the hospital for years, he died at 50 years old in 2009.

Bonner said she was laid off from her job during COVID and decided to retire. Even while collecting his pension, she unretired two years later due to financial struggles, including the rising cost of rent and groceries.

She took Social Security earlier than planned in 2022 and, as recently as three months ago, was working three part-time jobs, but recently narrowed it down to two.

“I still collect my Social Security and stuff, but I couldn’t afford to do anything else,” she said. “Everything went for my bills.”

She said she doesn’t have an issue with continuing to work, but “my body’s wearing out.”

“I used to consider myself medium income when my husband was alive,” she said. “We had everything that we wanted or needed. Since all this, I feel that I am (in) poverty, but the government doesn’t feel that I’m at poverty, so I’m not entitled to anything.”

Her message to others younger than her is start getting ready for retirement years in advance.

“I was a widow at 50 and I wasn’t prepared,” she said. “I never dreamed that I would be in this predicament. Prepare yourself. Don’t ever think you’re too young to start saving.”

Financial planning

Leaders of area financial planning firms told this news outlet they were not surprised survey results show people aren’t financially prepared for retirement.

“Many people are not taught basic financial principles to be successful and have never built the habits,” said Joe Schmitz Jr., founder and CEO of Peak Retirement Planning. “We mostly work with those who have been diligent savers, so we do not see it as often but know it is real.”

Those who are in or near retirement should find a team to work with that they can trust to help them, Schmitz said.

“Most people don’t want to read the tax code every day,” he said. “You’ve worked hard your entire life for your retirement and you deserve to enjoy it the way you want to. Navigating retirement is complex, and finding the right team to help guide you will make all the difference.”

Shon Anderson, president and chief wealth strategist of Anderson Financial Strategies, said much has evolved with retirement planning since he started in the financial planning industry in 2003.

“In general, people seem to pay more attention to their finances and at least have some background knowledge prior to sitting down with a planner,” he said. “They’re asking about things like ‘when is the best time to take Social Security’ and ‘How can we minimize taxes along the way.’

“They are also asking better questions of their planner such as ‘Are you a CFP? Are you fee-only? How often will you review our plan?’ These can go a really long way in reducing friction in their plan.”

Anderson said his firm typically sees people come to it when they are within about 10 years of retirement or already retired.

“They usually have a decent amount of retirement savings built in but are generally looking to optimize not only their investment portfolio but also more detailed areas of their financial plan,’ he said. “Within plans, we help clients navigate areas of estate planning, insurance planning, tax minimization strategies, and much more.”

He said retirement planning should start “at least by age 30″ for several reasons.

“The power of compound growth works better with more time,” Anderson said. “If a 25-year-old invests $200 a month in a retirement account earning an average annual return of 7%, they could have nearly $480,000 by age 65.

“If they start at 35, they’d have only about $240,000, even with the same monthly contribution.”

Secondly, early saving allows a person to achieve his or her goals with smaller, more manageable contributions over a longer period. Third, “starting early helps build strong financial habits,” he said.