BY PUBLIC ADVOCATE LETITIA JAMES
When we think of retirement, we like to imagine years of relaxation after a lifetime of hard work. But the unfortunate reality for millions of New Yorkers is that retirement is more likely to be a time of desperation and abject poverty.
That’s because the current retirement system is broken. Pensions, once the hallmark of retirement savings, are becoming a luxury of the past. In 1985, over half of American workers nearing retirement had a defined benefit plan, but in 2009 only 29 percent were expecting pension income in retirement. And Social Security has faced brazen attacks in Washington, threatening the future of a vital benefit that has provided retirement security for millions since the New Deal.
In light of this grim reality, the time is now for New York City to offer new avenues for retirement savings for all New Yorkers.
Last month, my office issued a report highlighting the urgent need for New York City to take action against an impending retirement crisis. By 2035, the city’s senior population is expected to explode to 1.5 million — a dramatic increase from the number of seniors today. Meanwhile, recent data shows that only 41 percent of working New Yorkers have access to an employer-sponsored retirement plan, down from 49 percent a decade ago.
If current trends continue, everyday retired New Yorkers will struggle to pay the bills as they fight to survive on fixed incomes. My report found that for a retiree in New York City to live at the poverty line for 15 years, they would need over $215,000 in savings and income. But most New Yorkers today have less than $100,000 saved for retirement, and over 40 percent have under $10,000 saved. The savings problem is even more acute for communities of color and women. Over 75 percent of black households and 80 percent of Latino households have less than $10,000 in retirement. And, nationally, there are twice as many women than men living in poverty.
The lack of affordable housing in New York City has also hit retired New Yorkers especially hard. Forty seven percent of New Yorkers over the age of 70 are considered rent burdened, forcing many seniors to choose between housing, food and transportation.
That’s why I have introduced legislation in the City Council that would help move forward the process of creating a city-based retirement savings program — a program that would place no significant financial burden on taxpayers or private employers, but uplift millions of New Yorkers for generations to come. Accounts would be pooled and centrally managed, which will help keep fees low given the expected high participation rates.
States like California, Illinois and Massachusetts are already moving forward with similar programs, and New York City cannot fall behind. Retirement should not just be a luxury for the rich, and I am determined to do everything I can to ensure every working New Yorker can live out their golden years in dignity.