Loss Of Pensions, Savings To Blame
A study released by the Schwartz Center for Economic Policy Analysis at The New School and City Comptroller John Liu showed a growing number of New Yorkers don’t have enough money to retire, with over one-third of older residents are expected to either subsist on Social Security, or not be able to retire at all.
The study, entitled “Are New Yorkers Ready for Retirement?,” is part of a research initiative which used recent New York City and New York State metropolitan-area data, the report examines whether New York City residents are financially prepared for their senior years. The answer, increasingly, is no.
The study found the following:
– Between 2000 and 2009, the percentage of employees in New York City who had access to employer sponsored retirement plans declined from 48 percent to 40 percent – below the U.S. average, which is 53 percent (2009).
– Only 35 percent of New York City workers participated in an employer based retirement plan in 2009.
– More than one-third of New York City households in which the head is near retirement age will have to subsist almost entirely on Social Security income or will not be able to retire at all due to the fact that they have less than $10,000 in savings.
“It is a significant public policy concern when such a high proportion of the workforce will not have enough money in their retirement years,” Liu said. “This report focuses attention on the need to help workers, both public and private sector, properly prepare throughout their working careers for their eventual retirement.”
The report found that employers have become less willing or able to sponsor pensions-a trend that is true across most industries, and affects New Yorkers of all ages and income groups. The brewing retirement crisis cuts across ethnic and gender lines.
“The deck is becoming increasingly stacked against New Yorkers in their efforts to retire,” said SCEPA Director Dr. Teresa Ghilarducci, Ph.D. “Fewer New Yorkers have access to the convenience and affordability of employer-sponsored retirement plans. More and more residents now face a choice between retiring into poverty or continuing to work in old age. Without significant policy reforms, the economic tea leaves foretell a decrease in the standard of living for retired New Yorkers. “
The study was authored by Ghilarducci, a national expert on public pensions and retirement issues, along with economist Dr. Joelle Saad- Lessler, Ph.D. The New York City Comptroller’s Office Budget and Policy Bureau provided key data and analysis.
The main study data were drawn from the 2001 and 2010 Current Population Survey (CPS), the 2008 Survey of Income and Program Participation (SIPP), and the 2009 New York State Personal Income Tax Files.
Download the “Retirement Readiness” Report and Fact Sheet at www.comptroller.nyc.gov/rsnyc.