Boomers declare a stronger position on Social Security, Retirement; Middle class unprepared for retirement
NEW YORK, Oct. 26, 2016 /PRNewswire-USNewswire/ — By huge majorities, the city’s Gen-Xers and Baby Boomers think Democratic presidential nominee Hillary Clinton would do a better job than Republican Donald Trump in protecting Social Security and addressing the retirement needs of seniors.
That’s the finding of a new AARP New York-Siena College survey, which also found both generations struggling to afford basic necessities such as food, housing and utilities, and massively unprepared for retirement; just one in five city Gen Xers and Boomers have planned for retirement, while two-thirds worry about having enough money to retire.
Clinton topped Trump by 69% to 21% on protecting Social Security and 67%-20% on retirement, according to Countdown: New York’s Vanishing Middle Class.
This coming year provides a key window for elected leaders at both the state and federal levels to help restore retirement as a real option for New Yorkers.
Building a nest egg becoming harder
“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.
“Nearly 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. “Only one in five Xers and Boomers are living comfortably, with middle class Xers among the most likely to struggle to get by.”
Having a serious financial impact on half or more of respondents are the cost of housing (for 75% of Gen Xers and 69% of Boomers), food (53% Gen X, 49% Boomers), transportation (56% Gen X, 47% Boomers), utilities (59% both), the telephone survey of 868 city residents found.
Meantime, 52% of respondents have not researched social security benefits; 65% have not researched Medicare benefits; 78% have not written out a plan, including a budget, for retirement; 47% have not discussed retirement with their life partner or family; 59% have not made a decision about where to live; and 69% have not made a plan for care if they should become sick or disabled.
Future health care costs present huge concerns. Only 13% of Xers and 16% of Boomers are very prepared to pay an estimated $476 per couple in monthly out-of-pocket healthcare costs. And over 80% of middle class Xers and Boomers (earning $40,000 to $120,000 annually) are unprepared to pay more than $50,000 a year in long-term care. Yet a home health aide costs $52,620 annually on average, while the average yearly cost of a New York City nursing home exceeds $140,000.
Solutions to Help New Yorkers be Prepared for Retirement
Among all survey respondents, 61% worry very often or often about having enough money to maintain their standard of living in retirement. Nearly half (46%) of respondents 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 18- to 64-year-old 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 five (82%) survey respondents support a state-facilitated workplace retirement savings option for private sector workers who lack access to one at their job. 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.
Governor Andrew Cuomo has launched the “NY SMART” (Saving More to Achieve Richer Tomorrows) Commission to study lack of retirement savings and propose solutions. Earlier this year, Mayor Bill de Blasio and citywide leaders announced plans to push an auto-enrollment plan for private sector workers in the city. While the U.S. Labor Department recently finalized a rule allowing states to proceed, a rule covering cities is still in draft form.
Meantime, while two out of five respondents expect to rely on Social Security, more than half (54%) of Gen Xers 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% cut in 2034 that could cost recipients as much as $10,000 a year. 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 21st Century and to press congressional candidates to commit to working with the new administration.
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 4.3%; plus or minus 6.1% for both the Gen X sample of 408 respondents and the Boomer sample of 460 respondents.