Baby boomers rethink their golden yearsJudy Dahlseid's boss at aSt. Paul design firm thought a retirement party was in order for the 71-year-old. Her reply? “I said, ‘You know, I’m not retiring. That’s your assumption,’ "
By: Kim Thompson, St. Paul Pioneer Press
After 25 years on the job, Judy Dahlseid didn’t expect a pink slip.
Her boss at the St. Paul design firm Arthur Shuster Inc. thought a retirement party was in order for the 71-year-old.
“I said, ‘You know, I’m not retiring. That’s your assumption,’ ” Dahlseid said, recounting the conversation from February. “‘You laid me off. Don’t try to give me a party and tell me I’m retiring.’”
Instead, the interior designer started her own business.
An increasing number of people are like Dahlseid, many feeling the necessity to stay in the work force as long as possible, often beyond the typical retirement age of 65. Last year, 17 percent of people older than age 65 were in the work force, up from
14 percent in 2000, according to new data released Thursday from the American Community Survey.
Many factors are contributing to this trend. Among them: a decrease in pensions for private-sector workers, the hit investments took during the recession, and even the housing crash, experts say.
In the near future, employers are also going to find it necessary to make working longer more attractive, said Steve Hine, director of Minnesota’s labor market information office.
As more baby boomers reach retirement age, the work force is going to grow more slowly than ever before, making it difficult for employers to fill positions, Hine said. Companies will need to offer older workers more flexibility and better pay and benefits, he said.
“It’ll move toward more of a ‘seller’s market’ if you will,” Hine said.
After being laid off, Dahlseid decided she’d be better off staying in the work force. Her retirement savings wasn’t enough to maintain her lifestyle, including being able to stay in her townhome in St. Paul.
About 10 years earlier, Dahlseid had tapped her 401(k) to start a business selling lamps and lampshades, but the venture wasn’t as successful as she hoped. After a couple years, she returned to Arthur Shuster and hoped to build back her retirement savings.
But it didn’t happen.
Private-sector workers are having a tougher time retiring than their public-sector counterparts, in part because only 3 percent have defined-benefit pensions that pay guaranteed monthly amounts for the rest of their lives.
Private companies instead have been offering employees defined-contribution plans — such as a 401(k) — that don’t come with the same kind of guaranteed monthly payments. What’s left after a person retires depends on how much he put in during his career and how well the investments did.
The market crash of 2008 hammered many people’s retirement savings, making it particularly difficult for some who were on the cusp of retirement.
Many who intended to draw money from home equity also took huge hits when the housing market crashed, Hine said.
These financial hardships definitely have a role to play in keeping seniors in the work force, but they are not the only contributing factor, experts say.
More workers than ever are “not at all confident” that they will have enough money to retire comfortably, according to an annual Retirement Confidence Survey conducted by the Employee Benefit Research Institute.
Oriane Casale, a researcher at the Minnesota Department of Employment and Economic Development, thinks that workers should be a bit more optimistic.
“The economy is improving quite rapidly,” Casale said. “Now that investments are doing much better, we’re seeing a sharp tick up in retirements.”
More retirements will free up jobs, helping to lower the unemployment rate, she said.
On Thursday, DEED reported that Minnesota gained 12,200 jobs in August and that the state has now regained all the jobs lost during the Great Recession.
Though things are looking up for the work force, many people have yet to see any improvement.
Herb Roy, 77, is among the many Minnesotans taking advantage of workforce centers that help unemployed workers obtain new skills and find jobs.
“I spend a lot of time in these workforce centers, and the thing that really strikes me is the talent and skills going to waste right now,” said Roy, who was laid off at Brink’s in January.
Roy said he has only enough retirement savings for a year or two. He’s been looking for employment since his layoff and now hopes to be a school bus driver.
Dahlseid also had a lot of help from the St. Paul Workforce Center. In the months since she was laid off, she has had some success working as a design consultant from her home. She doesn’t get a lot of business — mostly she designs for friends of friends and advertises through word of mouth — but she’s making enough to get by.
"If I keep working, I’ll be fine,” she said.