New Yorkers Face “Downward Mobility”

By Elizabeth Ody - Jan 27, 2012 1:54 AM GMT+0700

About one third of New York City residents nearing retirement age won’t be able to quit or will have to rely entirely on Social Security because they have less than $10,000 in savings, according to a study released today.

About 40 percent of New York workers had access to an employer-sponsored retirement plan in 2009, compared with the national average of 53 percent, according to the report by the New School’s Bernard Schwartz Center for Economic Policy Analysis. It was released by the Office of New York City Comptroller John Liu.

“It’s going to mean a generation of retirees will do worse than their parents and grandparents,” Teresa Ghilarducci, the center’s director, said in a telephone interview. “This means a lot more downward mobility.”

About 36 percent of households near retirement had less than $10,000 in liquid assets and about 19 percent had $10,000 to $99,999, according to the report. The median net worth of New York households where the head is nearing retirement, defined as age 55 to 64, was $442,450 including home equity, for married couples. It was $46,000 for single people.

“We have a large proportion of people who are nearing retirement, but without enough money to live comfortably,” Liu said in a telephone interview. For those households with less than $10,000, “that gives you probably a movie every couple of months,” said Ghilarducci.

The top 1 percent of New York taxpayers earned an average of $2.2 million in 2009, according to a Dec. 6 letter by the city’s Independent Budget Office. There were almost 35,000 taxpayers in that group.

Retirement Assets

Total retirement assets in the U.S. were $17 trillion in September, according to the Washington-based Investment Company Institute, a trade group for the mutual-fund industry. That included about $4.2 trillion in government-sponsored pension plans and $2.3 trillion in private-sector defined-benefit plans.

The study from the Comptroller’s Office included data from 2001 and 2010 surveys by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics, in addition to data from a 2008 nationwide survey on income levels and 2009 New York State income-tax returns, according to the report.

To contact the reporter on this story: Elizabeth Ody in New York eody@bloomberg.net

To contact the editor responsible for this story: Rick Levinson at rlevinson2@bloomberg.net.