ALBANY, N.Y. – New York’s middle class is struggling to afford basic necessities as retirement is becoming an illusion for them, with Generation Xers even worse off than Baby Boomers.
That’s according to a new statewide Siena College telephone survey of 806 New Yorkers age 35 to 70, which found the cost of food is having a serious impact on the financial condition of 59% of middle class Gen Xers and 39% of middle class Boomers, as are utility (68% Gen X, 58% Boomer) and housing costs (81% Gen X, 70% Boomer).
Countdown: New York’s Vanishing Middle Class also reveals a “trust gap,” with Gen Xers far less confident than Boomers that they’ll have the means or receive promised benefits to live comfortably in retirement. In fact, 48% of middle-class Gen Xers say they don’t plan to live in New York at all in retirement. And research suggests Millennials face an even more uncertain financial future.
Respondents to the AARP-commissioned poll think Democratic presidential nominee Hillary Clinton would do a better job than Republican nominee Donald Trump protecting Social Security (57%-31%) and addressing the retirement needs of seniors (55%-30%).
This coming year provides a key window for elected leaders at both the state and federal levels to help restore a financially independent retirement as a real option for middle class New Yorkers.
“Building a financial nest egg is becoming harder, but we can ease the middle class squeeze if our elected leaders restore trust by helping New Yorkers help themselves save and by safeguarding the future benefits they’ve earned,” said Beth Finkel, State Director of AARP in New York.
“Nine out of 10 Gen Xers and Boomers say it is a problem for New Yorkers to save enough for retirement. They should know; they are living it,” said Don Levy, Director of the Siena College Research Institute. “Nearly half of Boomers and even more Xers are today just getting by at best, and despite most Xers and nearly a third of Boomers being concerned that Social Security benefits may not be there for them, few have done all they can to plan and prepare for their retirement.”
AARP and Siena unveiled the survey results (streamed live on Facebook at facebook.com/aarpny) tonight as part of a community conversation with over 100 Capital Region residents moderated by Susan Arbetter, host of The Capitol Pressroom radio show, at Albany’s Renaissance Hotel.
The survey shows more than three times as many middle class Gen Xers (born 1965-1980 and earning $40,000 to $120,000 annually) than middle class Baby Boomers (born 1946-1964) are finding it difficult or very difficult to manage financially (24% vs. 7%).
Solutions to Help New Yorkers Save for a Financially Independent Retirement
Among all survey respondents, 60% worry often about having enough money to maintain their standard of living in retirement. And most respondents (52%) said government is doing a poor job making it possible for New Yorkers to save enough for retirement.
Independent AARP research shows over half of all private sector employees in New York can’t get a traditional workplace retirement savings plans such as a pension or 401(k) – and it’s worse the younger the worker, with over 60% of Millennials lacking access.
More than four of every five survey respondents (82%) support a state-facilitated workplace retirement savings option for private sector workers who lack access to one at their job.
The U.S. Department of Labor recently cleared the way for states to enact retirement savings plans. Governor Andrew Cuomo has launched the “NY SMART” (Saving More to Achieve Richer Tomorrows) Commission to study lack of retirement savings and propose solutions. AARP is advocating a professionally-managed, automatic payroll deduction model that allows employees to opt out - since studies show over 90% of employees participate if auto-enrollment is provided.
Meantime, nearly three of every five Gen Xers (57%) said they’re not confident they’ll receive promised Social Security benefits. And 82% of both generations call the likelihood that Social Security will remain available for future generations a serious problem.
In fact, Social Security benefits face a nearly 25% cut in 2034 that could cost recipients as much as $10,000 a year if federal leaders don’t act. AARP is conducting a “ Take A Stand” campaign this year to press the presidential candidates to detail their plans for updating Social Security for the 21 st Century and to press congressional candidates to commit to working with the new administration.
More than half of both generations haven’t researched their Medicare benefits (64%), haven’t developed a budget for their retirement (77%), haven’t made a plan if they become sick, disabled or unable to care for themselves (62%), don’t work with a professional planner to help with their retirement (70%) or haven’t bought long term care insurance (81%).
AARP offers consumers resources to help them plan, including calculators to help determine Social Security benefits, retirement preparedness and health care needs, as well as financial workshops. The survey has a margin of error of plus or minus 5.9% (Gen X sample), 6.3% (Boomer sample).
Follow us on Twitter: @AARPNY and Facebook: AARP New York
AARP is a nonprofit, nonpartisan organization, with a membership of nearly 38 million that helps people turn their goals and dreams into 'Real Possibilities' by changing the way America defines aging. With staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, AARP works to strengthen communities and promote the issues that matter most to families such as healthcare security, financial security and personal fulfillment. AARP also advocates for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name. As a trusted source for news and information, AARP produces the world’s largest circulation magazine, AARP The Magazine and AARP Bulletin. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. To learn more, visit www.aarp.org or follow @AARP and our CEO @JoAnn_Jenkins on Twitter.