Stress, Savings and Security

The fact that New Yorkers, like many across the country, are facing a potential retirement savings crisis should come as no surprise. And yet, a report released on May 20 by AARP, “High Anxiety: Gen X and Boomers Struggle with Stress, Savings and Security,” contains a startling analysis of the looming challenges that threaten the financial security of millions of New Yorkers.

The study, commissioned by AARP to gauge the confidence and financial preparedness of New Yorkers from the Generation X (ages 35-50) and baby boomer (ages 51-69) generations, found that both groups face significant challenges in the lead-up to retirement, with the younger generation reporting markedly higher levels of financial anxiety.

The study’s findings paint a grim picture. With the average retirement savings account balance for working-age New Yorkers hovering around $3,000, and 3.6 million New Yorkers lacking access to a workplace retirement plan, AARP representatives stressed the need for statewide action.

While unveiling the report’s findings at an Albany event, co-hosted by City & State, Beth Finkel, state director of AARP New York, outlined the worrisome financial state of Gen Xers specifically, as well as the importance of finding a statewide solution to their generation’s “crisis.”

“As the first members of Gen X turn 50 this year, many have not built retirement savings,” Finkel said. “They are sandwiched between paying for their children’s education and caring for their aging parents.”

If left unaddressed, Finkel argued, the financial struggles of many Gen Xers could have a significant long-term impact on the fiscal health of the state. Among the report’s findings was that 66 percent of Generation X respondents said they plan to retire outside of New York, a veritable “Genexodus” if it comes to pass.

“It is vital that our elected leaders address this issue,” Finkel warned. “An uncertain future for Gen X will mean an uncertain future for New York State.”

Mary Beth Labate, the state budget director, offered the Cuomo administration’s perspective on retirement savings for residents.

Tracing the root causes of the crisis, Labate cited the 54 percent drop in median net worth caused by the Great Recession and the steady decline in union affiliation as contributing factors to increased economic anxiety.

“Eighty-two percent of union members have traditional pensions, compared to 22 percent of non-union members, so this drop has had a significant impact on overall retirement savings,” Labate said.

She pointed to items from this year’s budget, such as an allocation of $5 million for emergency home repairs, as well as the state’s No Wrong Door initiative, which connects seniors to a host of services, as actions taken by the state to confront the challenges facing New York seniors. However, Labate conceded that true progress could only come with the implementation of incentives for middle- and low-income New Yorkers to save more for retirement through increased access to workplace retirement plans.

Labate outlined four key components—increased availability of such plans, auto-enrollment, auto-investment and auto-escalation, or increases in deductions linked to increases in pay—as essential to any statewide solution.

“We must set up people to have a vibrant life in retirement,” Labate added.

On a panel that followed Labate’s remarks, representatives from AARP, the National Institute on Retirement Security and New York and Illinois state governments echoed Labate’s vision for increased access to retirement plans.

Julian Federle, chief policy and programs officer for the Illinois state treasurer, described his state’s success in passing the Secure Choice Savings Program Act, a state-mandated retirement savings plan for employers with 25 or more employees. The Illinois law impacts businesses that are more than two years old and currently offer no retirement plan for employees. 

“It is a mandatory program, but there is an opt-out provision,” Federle said. “In fact, auto-enrollment is critical to the success of the program.”

The Secure Choice Act’s investment vehicle is similar to a traditional Roth IRA. And like a 529 plan, the state-run earnings incentives program that has become a popular way for families to save for their children’s college education, the vehicle’s funds are independent from the state Treasury, ensuring that they cannot be used in the case of a budget shortfall. The law also establishes a seven-person board, with appointees from the governor, treasurer and comptroller, who will handle all fiduciary duties of management.

“We wanted to eliminate the concern that the employer could be blamed in the case of a bad investment,” Federle explained.

Sarah Mysiewicz Gill, senior legislative representative for AARP, praised Illinois’ efforts and offered Washington State as another potential model for New York.

In contrast to Illinois’ creation of a new investment vehicle, Washington has established a marketplace where people can browse state-vetted retirement plans. This “portal model,” Gill argued, is advantageous in that it ensures that retirement savings programs are sufficiently transparent.

“This really helps small businesses compare apples to apples, which has been a big problem in this process thus far,” Gill said.

Regardless of the specific approach taken by individual states, Gill argued that states must act to increase access to retirement savings plans.

“This is a bipartisan issue that knows no boundaries. Financial institutions have come to the table. Labor unions have come to the table. There is broad support for action,” Gill said.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.