BY BETH FINKEL
New York City’s Generation Xers and Baby Boomers are massively unprepared for retirement. That’s according to a new AARP New York/Siena College survey, which found—alarmingly—that just one in five city residents ages 36 to 70 has planned for retirement, while two thirds worry about having enough money to retire. And nearly nine out of 10 say it is a problem for New Yorkers to save enough for retirement.
That foreshadows big problems in Queens, where the 65+ population is projected to grow about 45 percent by 2035. That means tens of thousands of additional retirees in the borough—future retirees who are not at all financially prepared.
They’re looking to elected officials to address this issue. But nearly half (46 percent) of the survey respondents said government is doing a poor job of making it possible for New Yorkers to save enough for retirement.
Luckily, this coming year provides a key window for elected leaders at the city, state and federal levels to help restore retirement as a real option for New Yorkers.
AARP research shows over half of all 18- to 64-year-old private-sector employees in New York State can’t get a traditional retirement savings plan such as a pension or 401(k) through their job. But those workers—like earlier generations—should have access to what has proven to be an incredibly effective savings vehicle: a workplace retirement savings option.
Earlier this year, Mayor Bill de Blasio and other city leaders announced plans to create such an option, with auto-enrollment, for private-sector workers in the city. At the state level, Governor Andrew Cuomo has launched the “NY SMART” (Saving More to Achieve Richer Tomorrows) Commission to study lack of retirement savings and propose solutions. The U.S. Labor Department recently finalized a rule allowing states to proceed with creating a plan, and a rule covering large cities including New York is in draft form. AARP New York is advocating at both the city and state levels to ensure our elected leaders follow through, so more people can begin saving the money they’ll need in retirement.
Still, increasing access to savings plans is not enough; two out of five respondents expect to primarily rely on Social Security in their retirement. Yet more than half (54 percent) of Gen Xers (born 1965 to 1980) said they’re not confident they’ll receive promised Social Security benefits. In fact, if federal leaders don’t act, Social Security benefits face a nearly 25 percent cut in 2034 that could cost some recipients as much as $10,000 a year. The incoming president must detail plans for updating Social Security, and members of Congress must commit to working with the new administration to act in the coming year.
In the meantime, New Yorkers are aging, and often relying on unpaid family caregivers and senior services to provide necessary care to help them remain in their homes, rather than in costly and mostly taxpayer-funded nursing homes. Over the past year, the city has taken several significant steps to help and support caregivers through legislation. But more needs to be done.
Unfortunately, the Department for the Aging’s (DFTA) budget isn’t keeping pace with the needs of our growing senior population. While other city departments have seen funding boosts, DFTA remains significantly underfunded. And while the overall size of the city’s workforce grew by 9 percent, DFTA has only seen 2 percent growth. Senior services need significantly more funding, including support services for caregivers and core services such as case management, home-delivered meals and senior centers—which in the end are both compassionate and cost-effective investments.
With an aging population, our elected officials across the city, state and nation must rise to the occasion and provide much-needed support for our current and future retirees.
Beth Finkel is the state director of AARP New York.